Recent proposals to change the way some UK pension funds are invested,including the Mansion House Accord and the creation of consolidatedmegafunds, aim to support pension schemes in exploring greater investment inUK growth assets. One sector well-positioned to benefit is Britain’s growingcohort of high-quality deep technology companies.

Deeptech businesses are at the frontier of innovation, often requiring scientificand technological breakthroughs prior to commercialisation.

Their complexity and long development timelines demand patient capital; acharacteristic that aligns naturally with the long-term horizon of private markets.

With the right access, pension fund investment managers can tap into thisdynamic sector, potentially delivering strong, sustained returns for schememembers. And this is a growing market; in 2024, UK deeptech companiesattracted $4.2bn in venture capital investment, a 21 per cent increase year-on-year, according to the European Deep Tech Report 2025.

Quantum computing is a breakthrough technology with the potential totransform industries, from financial modelling and cyber security to drugdiscovery and life sciences.

While not yet mainstream, progress is accelerating, and the next decade isexpected to bring significant commercial impact. As with the current wave of AIadoption, early engagement in quantum could position investors to captureoutsized long-term returns.

Historically generalist investors have limited their exposure to deeptech due to alack of familiarity with the underlying technologies, particularly in areas likequantum computing, where the science is complex.

Concepts such as qubit counts or coherence times may seem impenetrablewithout a technical background in the field. The solution lies in experienced assetmanagers with deep expertise in the underlying technologies and the ability toconstruct a diversified portfolio that spreads risk across multiple technologies.

Once this barrier is overcome, deeptech, including quantum, can play a valuablerole in a diversified portfolio, offering the potential for strong, risk-adjustedreturns over the long term.

Quantum capital allocation strategy

A successful quantum capital allocation strategy depends on partnering withspecialist fund managers who have the expertise to navigate this complex butpromising space.
Encouragingly, the UK now has a growing ecosystem of deep tech investmentprofessionals capable of building diverse portfolios, managing risk effectively,and identifying high-potential opportunities.

The increasing maturity of the sector, coupled with a strong UK talent base,makes now a compelling moment to explore allocation. For institutional capital,this provides a robust and increasingly accessible route to capture long-term,risk-adjusted returns from one of the most transformative technologies of thefuture.

As pension funds gain more access to these opportunities, enabled by a growingbase of experienced managers, improved private market liquidity and thecollaborative development of supportive fund structures such as LTAFs, their participation has the potential to transform the availability of scale-up capital inthe UK.

This, in turn, could accelerate the growth of breakthrough technologies anddeliver meaningful long-term value for scheme members.