The UK’s life sciences sector has been given a boost on news that it will be dished up a slice of a £200 million cash pie taken from the UK Innovation Investment Fund (UKIIF).

The government announced this week that the European Investment Fund has been picked to manage the £200-million UK Future Technologies Fund (from which £100 million was raised by the EIF itself) – which will also benefit digital and advanced manufacturing businesses.

The first investments will be made in UK venture funds, with cash injections destined for technology-based businesses “where there are significant growth opportunities, driving the UK economy forward and creating highly skilled jobs”, the government said.

The UKIIF, which was launched in June last year by Prime Minister Gordon Brown under the government’s strategy for Building Britain’s Future - designed to build “a stronger, fairer and more prosperous country” – operates on a fund of funds structure, which means that monies will not be invested directly in companies but instead a small number of specialist, private sector technology funds which have the expertise to invest directly in technology businesses.

The idea is that by boosting the stream of venture capital available to these funds the UKIIF will help to propel investment in high growth businesses, including start-ups and spin-outs and those that have yet to book any profits or sales and are finding it difficult to raise cash in the current difficult economic climate.

And it seems the idea is starting to pay off. “Despite a tough market, the UKIIF goes from strength to strength,” said Science and Innovation Minister Lord Drayson. “Private funds have matched the government's investment and money can now flow into promising technology companies [and] this is just the boost these companies need as the economy returns to growth,” he remarked.

The BioIndustries Association has also welcomed the news. “The closing of the fund is a significant step towards delivering much needed funding to life sciences companies in the UK and it is important that the fund managers act quickly,” said chairman Clive Dix. “We now hope that a significant proportion of the fund will be used to help make the UK’s life sciences companies the most successful in the world”.