The investment company set up by the universities of Manchester, Sheffield and Leeds has achieved a first close of $268m.

Northern Gritstone, the UK-based investment company co-founded by the universities of Manchester, Sheffield and Leeds, today achieved a first close of £215m ($268m).

The money has been provided by limited partners including Greater Manchester Pension Fund and West Yorkshire Pension Fund as part of Northern LGPS, M&G, Columbia Threadneedle, Lansdowne Partners and Bruntwood.

Private investors Andrew Law and Keith Breslauer have also contributed capital.

The company will invest in spinouts from its three university founders and across the north of England, aiming to provide a boost to a regional innovation ecosystem that has struggled to attract the same kind of investor interest as the golden triangle of Oxford, Cambridge and London.

Northern Gritstone expects to make its first investments in the coming weeks.

The amount raised thus far – towards a £500m target – exceeds initial plans to raise £150m for the first close.

Officially launched in July 2021, Global University Venturing first covered Northern Gritstone in April 2021, when Andy Hogben, head of impact and intellectual property at University of Sheffield, said: “Northern Gritstone is going to be absolutely game changing. It is really what we need to start thinking about as a region or the Northern Powerhouse – it is not about individual cities; it is about the whole area.”

Following the successful first close, Duncan Johnson, chief executive of Northern Gritstone, noted: “There is rightly huge excitement about the innovative, science-led spinouts emerging from our leading research universities and the ecosystems they support, and this has been reflected in our conversations with investors so far.

“We are greatly encouraged by both the size of our first close, and also the range and quality of investors that the Northern Gritstone proposition has attracted.

“Whilst fundraising will continue, this first close and the backing that Northern Gritstone has received from investors so far, allows us to begin making our first investments shortly. It also importantly enables us, alongside our friends and colleagues in the wider northern venture ecosystem, to accelerate the development of a northern innovation hub to rival the UK’s Silicon Fen and ultimately Silicon Valley.”

Thierry Heles

Thierry Heles is the editor of Global University Venturing, host of the Beyond the Breakthrough interview podcast and responsible for the monthly GUV Gazette (sign up here for free).