Pension companies to announce 5% commitment to growth assets

Voluntary move by providers comes ahead of chancellor’s Mansion House speech tonight

Professional Pensions
clock • 1 min read
Jeremy Hunt to make Mansion House speech tonight

Jeremy Hunt to make Mansion House speech tonight

Some of Britain’s biggest pension companies have agreed a voluntary compact to commit 5% of their investments to private equity and early-stage businesses, potentially unlocking up to £50bn by 2030, reports in the national press say.

The move comes ahead of chancellor Jeremy Hunt's Mansion House speech tonight (10 July) which is due to set out a series of reforms intended to channel tens of billions of pounds of Britain's pensions savings into high-growth companies.

The Financial Times said the chancellor would note voluntary move by some of the UK's biggest pension providers - firms it says include Aviva, Legal & General, Phoenix and Scottish Widows. It added two-thirds of the defined contribution (DC) pensions market will be covered by the pact.

A Guardian article added the compact deal could see about 5% of pension fund investments reserved for early-stage businesses in sectors including life sciences and fintech.

It said the chancellor was likely to say in his speech: "I want to lay out plans to enable our financial services sector to increase returns for pensioners, improve outcomes for investors and unlock capital for our growth businesses."

The move comes as an increasing number of DC schemes look towards growth assets and private equity investment.

In March, the £2bn Cushon master trust became the founder investor in the Schroders Capital Climate+ LTAF - committing 15% of its assets to a strategy which allocates between 20% and 40% of its assets to private equity.

In July, Nest announced the appointment of HarbourVest Partners to help it invest in private equity - part of its ambition to invest at least £1.5bn in private equity by 2025, as well as its more long-term target of having 5% of its portfolio invested in asset class.

More on Investment

Mitch Reznick, CFA, Head of Sustainable Fixed Income, Federated Hermes

Partner Insight: When sustainability challenges come into conflict

Data can only take you so far when it comes to evaluating sustainability

Mitch Reznick, CFA, Head of Sustainable Fixed Income, Federated Hermes
clock 28 November 2023 • 1 min read
Axa Investment Managers head of listed impact equity Anna Väänänen and head of investment specialist equity Stephane Lago

On demand: Making an impact on biodiversity through listed strategies

A PP webinar was held in conjunction with Axa Investment Managers on 21 November

Professional Pensions
clock 28 November 2023 • 1 min read
Stewart: We are thrilled to announce our commitment to the UK, one of the world’s most important and vibrant capital markets

Aware Super makes £5.25bn UK investment commitment

The pension fund has opened its first international foothold outside Australia

Holly Roach
clock 27 November 2023 • 2 min read