Investing in a quantum future: UK university technologies are aiming to lead the way
As part of our private markets capabilities available to third-party clients, we look into the institutional investment opportunity in quantum computing and how UK university spinouts are furthering innovation in this sector.
Quantum computing: accelerating research and discovery
Quantum computing redefines the limits of what computers can achieve with the ability to solve complex problems that are typically beyond the ability of traditional computers. We believe it has the potential to make a significant impact across industries such as energy, pharma and security.
The UK has established itself as a global hub for quantum research and development, fuelled by world-class universities, government initiatives, and an active start-up ecosystem. It’s producing some of the leading companies in the sector, originating from cutting-edge research. Notable spinouts from top universities such as Oxford, Cambridge, Imperial and UCL are now scaling off the back of meaningful funding rounds.
We believe there is a positive investment opportunity for institutional investors who can combine diversified exposure across multiple competing quantum computing hardware approaches with nearer-term market opportunities in platform technologies.
Universities are creating leaders in quantum innovation
Spinouts from top-tier universities are a cornerstone of the UK’s quantum innovation ecosystem. University of Oxford leads in quantum hardware spinouts across major technology tracks, with companies such as Oxford Quantum Circuits, Oxford Ionics (recently announced sale to IonQ), and Quantum Motion (jointly spun out with UCL) driving advancements in superconducting, trapped ion and silicon spin.
On the quantum software front, Cambridge Quantum (now part of Quantinuum), a University of Cambridge spinout, and Phasecraft, a University College London spinout, are advancing quantum algorithms and middleware for commercial applications.
PQShield, a University of Oxford spinout, forms part of our Private Markets portfolio. It’s at the forefront of developing quantum-resistant cryptographic solutions to safeguard against future quantum threats. PQShield’s technology is already influencing cybersecurity standards globally, illustrating how academic research is being applied to address critical real-world challenges.
These university spinouts collectively position the UK as a global leader in quantum technology innovation.
Investing in the race to quantum supremacy
We believe the UK’s quantum ecosystem offers a significant competitive advantage through its access to leading talent, proximity to diverse industries, and robust infrastructure for translational research. In our view, the combination of academic excellence, entrepreneurial innovation, and governmental support positions the UK as a global leader in the quantum revolution and positions the asset class as an exciting investment proposition for our third-party clients.
This article is an extract from a paper written by the Private Markets team. You can read the full article here.
Key risks
The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested.
Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
It should be noted that diversification is no guarantee against a loss in a declining market.
For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an L&G portfolio. The above information does not constitute a recommendation to buy or sell any security.
