Pension firms pledge to invest 10pc in private markets by 2030
Some of the UK’s biggest workplace pension providers have pledged to invest at least 10 per cent of their defined contribution (DC) default funds in private markets by 2030 under a new agreement.
The voluntary commitment, known as the Mansion House Accord, has been signed by 17 of the UK’s largest pension firms including Aegon, Aviva, Legal & General, Mercer, Phoenix Group, NatWest Cushon and Royal London.
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As part of the pledge, at least 10 per cent of frontline default pension investments will be allocated to private markets, including private credit and private equity, by the end of the decade, with five per cent specifically allocated to the UK.
The fresh commitment builds on the former Mansion House Compact, signed by 11 firms in 2023, which was a non-binding pledge to invest just five per cent into private markets by the end of the decade, with no vow to allocate anything to the UK.
The total pension assets in scope of the new agreement amount to around £252bn, according to the Association of British Insurers, the Pensions and Lifetime Savings Association and the City of London Corporation, which oversaw creation of the accord.
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“The investment case for UK private markets is strong, which is why we are a signatory to the Mansion House Compact and have also signed up to the new Mansion House Accord,” said Ben Pollard, chief executive of NatWest Cushon.
“This is a major opportunity for the pension and investment industry to support UK growth while delivering improved outcomes for pension savers,” added Amanda Blanc, group chief executive at Aviva.
“As a significant investor in private markets, Aviva has recently launched a number of funds to give over four million workplace pension customers even greater opportunity to invest in UK assets, including innovative, early-stage businesses, and we want to do much more.”
“I hugely welcome the pensions industry decision to invest in more productive assets, from growing companies to infrastructure,” said minister for pensions Torsten Bell.
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