Pension companies to announce 5% commitment to growth assets

Voluntary move by providers

Professional Pensions
clock • 1 min read
Jeremy Hunt will make Mansion House speech tonight. Credit: HM Treasury
Image:

Jeremy Hunt will make Mansion House speech tonight. Credit: HM Treasury

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 today (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 a voluntary move by some of the UK's biggest pension providers - firms it said included 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 that the compact deal could see about 5% of pension fund investments reserved for early-stage businesses in sectors including life sciences and fintech.

Chancellor unveils 'golden rules' for long-term sustainable growth

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 Pensions

L&G launches DC private markets offer and target date fund range

L&G launches DC private markets offer and target date fund range

Has already received ‘considerable interest’ from clients

Jonathan Stapleton
clock 01 July 2024 • 3 min read
Spring Budget 24: Chancellor reaffirms DC and LGPS investment disclosures

Spring Budget 24: Chancellor reaffirms DC and LGPS investment disclosures

'Ensure better value' for schemes

Jasmine Urquhart
clock 06 March 2024 • 1 min read
Autumn Statement 23: Hunt backs 8.5% state pension triple lock rise

Autumn Statement 23: Hunt backs 8.5% state pension triple lock rise

From April next year

Jenna Brown
clock 22 November 2023 • 3 min read
Trustpilot