Scottish National Investment Bank: review of performance 2026

Investments to date

57. The Bank is able to invest directly in companies and projects by way of debt, equity, or a combination of the two; to invest in funds; or to issue guarantees.

58. To date, the Bank has committed a total of £1.16bn with 53 live investments: 31 per cent in debt, 34 per cent in combined debt and equity, and 10 per cent in equity; and it invested 25 per cent in funds. It has yet to issue any guarantees.

59. The Bank’s smallest investment to date was £700,000; its largest £70 million. A quarter of its investments were under £5 million; a fifth over £45 million; but the largest proportion were in the range between £5 million and £45 million.

60. The Bank has invested widely around Scotland, in about half of local authority areas, with wider impacts touching nearly all of them: but roughly half of its investments so far have been in Edinburgh, Glasgow or Aberdeen city regions, reflecting the location of industry clusters; and there has been relatively little investment directly in the South of Scotland.

61. It should of course be emphasised that the balance of investments in the Bank’s portfolio, in terms both of type and of location, is influenced very heavily by the nature of the specific propositions coming forward – remembering that roughly half of the investments so far have come from approaches to the Bank. The type of investment also reflects the particular circumstances and needs of the companies and projects that the Bank is supporting.

62. The composition of the portfolio is also a reflection of the Bank’s overall strategy, against the twin backdrop of its missions and its need to ensure a reliable flow of returns, so that it is financially self-sustaining, balancing riskier longer-term investments against surer prospects.

63. Seen in that light, and bearing in mind that the Bank is an economic development institution, one might expect, over the period ahead, to see the proportion of equity in its portfolio growing relative to debt – all other things being equal.

64. It is also worth highlighting the Bank’s choice to invest fairly substantially in funds, in particular in relation to its innovation mission. There are good reasons to invest in funds: in order to increase exposure to sectors where relatively few specific propositions have come forward; to allow the Bank to be proactive in sectors where it does not currently have the capabilities to be an expert specialist investor; or to achieve greater impact through combining its resources with those of other private sector investors, as one way of crowding additional investment into particular sectors of the Scottish economy.

65. It has been put to me that investing in existing funds, as opposed to creating, catalysing the creation of, or participating in new ones, is not where the Bank stands to create most value-added as a mission-led impact investor. The Bank’s leadership will no doubt want to keep this in mind when considering its longer-term strategy, in particular in relation to their ambitions to attract third party capital, and to fulfil its goal of being a “cornerstone” investor.

66. It has also been suggested to me that issuing guarantees could be an effective way for the Bank to derisk propositions to attract other private capital without tying up too much of the Bank’s limited capital. I understand that to date no investee has sought a guarantee. But it seems to me that there would be merit in exploring the option for the future. I understand that work is in hand between the Bank and the Scottish Government to identify whether there is a market opportunity in this area; and if so what would need to be done to take advantage of it, including in relation to public finance rules and processes.