The UK government has come a long way since 1999 when Tony Blair told a meeting of the British Venture Capital Association (BVCA) that pension funds should allocate 5% of their assets to private equity.

The UK Prime Minister hoped his call would lead to more capital flowing to start-up companies. Four years on, Grant Peggie, the civil servant who wrote Blair's speech, recognises that UK private equity has more to do with buy-outs than venture capital. He also acknowledges that there is a difference between the government's objectives and those of the private equity industry and investors.