For an organisation affiliated to an 800-year-old university to be setting records and innovating is impressive.

And the University of Cambridge may smash its own investment record set this past year as it prepares to this month to announce its later-stage investment fund, Cambridge Innovation Capital, which is expected to be at least £30m ($48m) and to provide it with the opportunity to invest in its own companies.

Cambridge Enterprise (CE), the commercialisation company affiliated to UK-based Cambridge University, made a record level of investments in its spin-outs for the fiscal year ending July 31, totalling $3.62m over 10 investments, and is also putting together its second enterprise fund, allocating $2.2m for the 2013-14 tax year.

plastAnd in its annual report it said it had hit its £1bn external fundraising target, raised over the past 18 years, bringing it into a select group of universities to crack the billion barrier.

Tony Raven, CE’s chief executive since 2011, said in the summer: “The amount of follow-on funding raised demonstrates the market’s confidence in our portfolio companies and also shows the importance of the early-stage support and funding which Cambridge Enterprise provides.”

The follow-on funding announcement came in CE’s annual report, and adds strength to Cambridge’s claim to be the most successful technology cluster in Europe.

The university has more than 1,500 technology companies with a combined turnover of £11.8bn in 2011 and employs more than 53,000 people. The cluster has generated 12 companies valued at more than $1bn over the past 15 years, with two, microprocessor manufacturer Arm and Hewlett-Packard-owned Autonomy, valued in excess of $10bn.

But the act of setting up CE was far from easy. Teri Willey, Raven’s predecessor as chief executive of CE and now with effectively the same role at US-based life sciences research institute Cold Spring Harbor Laboratory, described it as “challenging”.

Willey, who followed two interim heads of the nascent CE in 2006, said: “As an 800-year-old institution, Cambridge University has complex decision-making paths and its own customs and rituals. It predates the Companies Act and there were moments during the restructuring [and CE’s formation] and the challenge of getting decisions through the consensus when I wondered if the cost was worth the return on investment.

“While I previously set up wholly-owned affiliates, this [CE] was challenging and required subtle changes in compensation to attract different types of people. It was a pleasure for me to have had the opportunity to work there and all credit is down to the team there that it has gone from strength to strength. The CE people are good eggs who have to be both very smart and love science and have an affinity for an academic institution with the best practices of business without being in a corporate environment.”

Before CE was founded during Ian Leslie’s tenure as the university’s pro-vice-chancellor for research from 2004 to 2009, Cambridge’s support ecosystem for helping faculty engage with business had grown up organically. Willey said: “[Before CE] it was hard to figure out who to talk to as there were 20 programmes on entrepreneurialism and organisations on ventures, tech transfer and industry research and the inventor owned the IP [intellectual property].

“This changed under Ian Leslie, who recognised the need for an outward-facing institution to engage business and faculty and bring these ideas to have an impact on the world. CE is a limited company with one shareholder, Cambridge University, so has business practices while not losing the core principle of developing the best science.

“CE’s board was wonderful, consisting of industry leaders, such as Mike Lynch [then chief executive of Autonomy – this year’s Global University Venturing Personality of the

Year award winner] and faculty, including [Prof Sir] Richard Friend [Cavendish professor of physics at Cambridge].”

Sir Richard said: “Cambridge Enterprise was created to provide a service to university researchers wanting to exploit their work. This culture of service has been really well established and I think most of the faculty and students who have used its services have been very pleased by this. Cambridge Enterprise has also positioned itself very realistically with industry and investors, and is very good at aligning expectations and opportunities.”

One of the important factors behind setting up CE were the changes by the UK government’s criteria on allocating research funding, which looks for metrics on “impact”.

Willey said: “With taxpayer-funded research looking for metrics on its impact for the country CE went from nice-tohave to critical must-have.”

And the results have paid off. CE maintains an 80% three-year survival rate for companies receiving investment from the venture unit, a big increase over the UK national average of 58%.

CE holds equity in 68 companies, including Plastic Logic, a flexible semiconductor company, and organic solar panels maker Eight19, both from its Cavendish Laboratory run by Sir Richard.

Also revealed in CE’s annual report was Cambridge’s big win on biotech spin-out BlueGnome, which became the university’s most profitable spin-out when it was acquired by life sciences firm Illumina last September in a £60m deal. Once fees were paid, the university walked away with £8.5m, or 92 times its initial investment.

Another big deal last year for CE was the acquisition of light-emitting diode manufacturer CamGen, spun out in 2010, by engineering firm Plessey for £10m – a fast turnaround from start-up to exit.

The first CE fund made three investments – Cambridge CMOS Sensors, DefiniGen and Inotec AMD – in November last year, and took part in a $2.5m series A round for life sciences spin-out Sphere Fluidics in February, which also attracted investment from private equity firm 24Haymarket and the Royal Society.

And its importance in the UK innovation ecosystem has only become more evident. During a keynote speech at UK-based training provider PraxisUnico’s annual tech transfer conference this summer,

Richard Jennings, the deputy director of CE, said funding and good management were the scarcest resource for spin-outs.

He pointed to a paradox in the UK whereby taxpayer-funded research and development supply continues to be in good shape, but local demand continued to dwindle as manufacturing, industrial diversity and the financial sector all continue to perform weakly.

However, he highlighted that UK tech transfer offices’ global focus helped to counter unfavourable business conditions in Britain.

And CE’s global approach, along with peers, such as those backed by Oxford University and Imperial College London, as well as successful start-ups, puts the university alongside other UK and US peers.

Imperial College London’s Imperial Innovations’ portfolio has raised £408m since its initial public offering in 2006, indicating that Imperial would also be in the $1bn club had it been operating for the same time as CE, while the recent and inaugural University Entrepreneurship report said that, from 2007 to 2011, Stanford, Harvard, UC Berkeley, New York, Pennsylvania and MIT have all secured $1bn or more in venture capital and angel funding.

Following centuries of work, therefore, a record year has brought its just reward as this year’s Global University 2013 Venturing Unit of Year Award.