Plans for a £300m fund to back companies which have been hit by the COVID-19 crisis have been abandoned after its principal sponsors failed to agree on its structure and investment strategy.

Sky News understands that proposals for the listed UK Growth and Resilience Fund, which was intended to be launched in the spring, have been dropped in the last few weeks.

The project was the brainchild of the London Stock Exchange Group (LSEG) chief executive, David Schwimmer, who convened a group of top City figures to discuss the venture late last year.

In January, Sky News revealed details of the plans, including the potential participation of fund managers BMO Financial Group, JP Morgan Asset Management and Octopus Ventures oversee three strands of investment, focused on private equity, listed small-cap companies and venture capital respectively.

LSEG would not have been a direct investor in the new vehicle but intended to waive most of the fees typically paid by companies listed on its exchanges, according to people close to the putative project.

Plans for the fund were discussed with Treasury officials and are said to have gained support from within government, but ultimately could not be agreed between the private sector stakeholders, they added.

One City figure whose views had been canvassed by Mr Schwimmer said the UK Growth and Resilience Fund described it as “potentially a once-in-a-generation opportunity to help with the government’s levelling-up agenda while providing investors with attractive long-term returns”.

The LSEG-inspired vehicle would be structured as an investment trust to enable institutional investors, wealth managers and retail investors to participate.

The idea for the fund underlined concerns about the long-term scarring of the economy and certain industries which have been rocked by the ongoing impact of the coronavirus crisis.

On Tuesday, the latest government-backed lending scheme for COVID-hit companies went live, replacing an array of programmes in place since last year.

An LSEG spokeswoman declined to comment.

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