Two funds backed with £150m from the UK government with the aim of boosting innovation and investment are struggling to raise and deploy capital 15 months after they were launched.

Hermes Private Equity Environmental Innovation Fund, which has received £50m from the government, has failed to attract any other money from third parties since announcing in January that it had raised £75m from the BT Pension Fund, which Hermes advises on its investment strategy, to supplement the investment by taxpayers.