But the big question for those on the receiving end, namely the consumer whose money is being invested, is the issue of risk. Early stage company investing is seen to be even more risky than private equity, where at least the investor is buying established businesses.
With early stage companies, these are businesses that are looking to get to the next stage of their development and need the money to do so.
Taylor says: "You've got to kiss a lot of frogs to find the prince. You have to do due diligence, and you will see a lot go under. The ones that survive generate more than enough return to mitigate this loss."
It is for this reason that VC funds typically do not take large stakes in early stage businesses in the same way as private equity does. And Taylor insists they are experienced in this field.
"We have already invested in 70 growth funds; these funds are invested in 1,200 companies. Some of these companies need more money and we can help with direct investment as they are then growing and they become more established.
"We may create something with an element of fund of fund investments. One of the core skills we have built up is fund manager selection; also an investor in later-stage companies as they scale up, and we're hoping to open up these skills to institutions."
In its annual report released last week, the institution revealed that it had realised £28.5mn in gains in the past financial year, an increase on the £11.5mn on the previous year – this is money coming back to the BBB.
However, last year its two big funds had to be revalued downwards, by £59.9mn in British Patient Capital and by £18.1mn in British Business Investments. The IRR was 13 per cent and 12 per cent respectively.
The bank as a whole also had to record a £122mn loss, following a loss the previous year of £135mn, as it revalued many of its tech investments, which struggled in the tech stock downturn.
Taylor points out that in 2021-22, it made a £605mn profit, and sees the loss as an "accounting loss" and part of the deal with "volatile assets". He adds that last year the bank invested £3.5bn of taxpayer money, which attracted £2.5bn of private sector money. This generated £8.4bn of additional economic activity, he says, and 39,400 jobs.
The annual report also says that costs were 1.26 per cent, down 20 bps on last year.
It is this last point that those saving into their pension, or at least their advisers, may have an issue with. VC funds are far more expensive than index trackers, following the similar private equity model of 2 per cent plus 20 per cent performance fee above a hurdle. The default scheme charge is 75 bps.
