Major UK pension fund managers commit £50 billion towards private equity and infrastructure projects under the Mansion House Accord agreement
The Mansion House Accord, a significant voluntary commitment by 17 of the UK’s largest workplace pension providers, aims to allocate up to £50 billion to private markets and infrastructure investments by 2030. This agreement seeks to boost financial returns for pension savers while simultaneously enhancing long-term investment in UK growth sectors.
The Accord includes major pension providers such as Aegon UK, Aviva, Legal & General, Mercer, NatWest Cushon, Nest, Phoenix Group, Royal London, and Universities Superannuation Scheme (USS), among others. The pension assets covered by the Accord currently represent about £252 billion, with the expectation this will grow over the Accord’s life.
Each signatory of the Mansion House Accord will target a 10% allocation of their defined contribution (DC) portfolios to private markets. A minimum of 5% of the allocated funds by each signatory will be committed to UK-based investments. The Accord builds on the earlier Mansion House Compact (signed in 2023), which focused on investing 5% of DC default funds in unlisted equities such as venture capital and growth equity by 2030, providing a staged approach to increasing private market exposure.
Liz Fernando, the Chief Investment Officer of Nest, signed the Mansion House Accord on behalf of Nest. The government-backed workplace pension scheme is one of the signatories, committing to investing at scale in private markets and in the UK. The accord will be supported by the forthcoming final report from the UK Pensions Investment Review and the British Growth Partnership, an initiative that will provide DC pension schemes and institutional investors with access to UK-focused venture capital funds.
The British Growth Partnership is expected to provide access to investment opportunities in the UK, focusing on clean energy, infrastructure, and high-growth UK businesses. The Chancellor, Rachel Reeves, described the initiative as a "bold step" that will unlock capital for clean energy, infrastructure, and high-growth UK businesses.
The Mansion House Accord represents a strategic effort to enhance retirement outcomes while contributing materially to the UK’s infrastructure and economic ambitions over the coming decade. By mobilizing pension funds at scale, it seeks to secure better financial outcomes for pension savers, boost investment in UK infrastructure and productive growth sectors, create a new, substantial source of capital for private capital managers and infrastructure projects, and align with wider regulatory goals.
The Treasury has confirmed that the British Business Bank has received FCA approval to launch the British Growth Partnership. The initiative, backed by pension schemes representing over 90% of workplace DC savers, is expected to release £25bn into the domestic economy over the next six years. The accord's goal is to boost economic growth and enhance pension returns by increasing exposure to private equity, infrastructure, and real assets.
- The Mansion House Accord, involving 17 UK pension providers like Aegon UK, Aviva, and Universities Superannuation Scheme (USS), aims to allocate up to £50 billion to private markets and infrastructure investments by 2030, targeting a 10% allocation of defined contribution (DC) portfolios.
- Each signatory, including the government-backed Nest, will commit at least 5% of the allocated funds to UK-based investments, building on the Mansion House Compact's focus on unlisted equities like venture capital and growth equity.
- The British Growth Partnership, initiated to support the accord, will offer DC pension schemes and institutional investors access to UK-focused venture capital funds, focusing on clean energy, infrastructure, and high-growth UK businesses.
- The accord, signed by Liz Fernando of Nest, is expected to release £25bn into the domestic economy over the next six years, enhancing pension returns by increasing exposure to private equity, infrastructure, and real assets.
- The Treasury has approved the British Business Bank to launch the British Growth Partnership, a strategic effort to boost economic growth and contribute materially to the UK’s infrastructure and economic ambitions over the coming decade.
- By mobilizing pension funds at scale, the Mansion House Accord seeks to secure better financial outcomes for pension savers, create a new, substantial source of capital for private capital managers and infrastructure projects, and align with wider regulatory goals.
