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5pc of assets in UK PE: 17 providers sign Mansion House Accord

by John Greenwood
May 13, 2025
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DC savers can expect to see 5 per cent of their fund channelled into UK private market investments under a voluntary agreement between 17 providers and the City of London Corporation that has been driven by HM Treasury.

Dubbed the ‘Mansion House Accord’, the agreement sees major providers and schemes express their intent to invest at least 10 per cent of their DC default funds in private markets by 2030, with half of that allocated to the UK.

Scottish Widows and Hargreaves Lansdown are absent from the list of provider signatories published in the joint statement from the government, ABI and PLSA.

Rachel Reeves, Chancellor of the Exchequer, said: “I welcome this bold step by some of our biggest pension funds, which will unlock billions for major infrastructure, clean energy, and exciting startups — delivering growth, boosting pension pots, and giving working people greater security in retirement.”

The Accord comes following a relentless drive from the Treasury and Department for Work and Pensions to encourage consolidation, on the basis that this should increase the likelihood of investment in UK private markets. The initiative takes further the 2023 Mansion House Compact of then chancellor Jeremy Hunt, which contained an aspiration for a 5 per cent allocation to private markets, but without a specific UK allocation. Ministers have threatened to legislate to mandate UK allocations in the event that providers do not make steady progress towards the Accord’s goals. At the same time, the Accord seeks to emphasise providers’ responsibilities under fiduciary duty and Consumer Duty.

Torsten Bell, minister for pensions  said: “Pensions matter hugely, they underpin not just the retirements we all look forward to, but the investment our future prosperity depends on. I hugely welcome the pensions industry decision to invest in more productive assets, from growing companies to infrastructure. This supports better outcomes for savers and faster growth for Britain.”

Based on providers’ current investment holdings, total pension assets in the scope of the agreement amount to £252bn. This is considerably less than the £666bn of bundled DC assets reported in Corporate Adviser’s Master Trust & GPP Report, published yesterday. That report showed the bundled DC assets of the biggest 19 providers in the UK, almost all of which are signatories to the Mansion House Accord, grew by £217bn in the last two years.

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Signatories to the new commitment include Aegon UK, Aon, Aviva, Legal & General, LifeSight, M&G, Mercer, NatWest Cushon, Nest, Now: Pensions, Phoenix Group, Royal London, Smart Pension, The People’s Pension, SEI, TPT Retirement Solutions and the Universities Superannuation Scheme (USS).

The report comes as research from NatWest Cushon shows 52 per cent of savers agree that pension funds should invest more in the UK and only 8 per cent disagree.

Yvonne Braun, director of policy, long-term savings, health and protection at the ABI, said: “As major investors, the pensions industry already plays a vital role in driving growth in the UK and globally. The Accord formalises the industry’s ambition to invest more in private markets to diversify investments, support innovation and infrastructure, and ensure prosperity.

“Investments under the Accord will always be made in savers’ best interests. It is now critical that Government supports the industry’s ambition, by facilitating a pipeline of suitable investment opportunities, tackling barriers to investments, and delivering wider pension reforms effectively.”

Alastair King, Lord Mayor of London, said: “The Mansion House Accord builds on the strong foundations of the Compact and signals a step change in ambition: more signatories, deeper allocations to private markets, and a clearer commitment to backing UK assets. That includes a renewed focus on revitalising the Alternative Investment Market (AIM) of the London Stock Exchange as well as the Aquis Exchange, which play a critical role in supporting high-growth companies that drive innovation, jobs and productivity. If we want those firms to scale in the UK, we must ensure they have the capital to do so. This is not just about better pension outcomes, it is about building a more dynamic, competitive investment ecosystem. Delivering long-term, sustainable growth is crucial and the City of London Corporation is delighted to have partnered with industry and Government to bring this ambition to life.”

Zoe Alexander, director of policy and advocacy at the PLSA, said: “UK pension schemes already invest billions in UK growth assets. This Accord demonstrates the collective ambition of the DC sector to do even more, as well as its confidence that the UK will provide the right opportunities to invest, consistent with schemes’ fiduciary duty to members.

“The Government, in its turn, has committed to take action to ensure there is a strong pipeline of investable assets for pension schemes. With everyone playing their part, there is great potential to boost returns for savers while providing vital funding to productive growth areas.”

Lorna Blyth, managing director – investment proposition, Aegon UK, said: “Realistic timeframes and a steady supply of high-quality UK investment opportunities across all private asset classes are crucial for ensuring success. This includes collaborating with more organisations such as the British Business Bank to provide access to diverse types of private assets – from private equity to infrastructure, which are all vital for optimising member benefits and developing investment portfolios designed for long term growth.”

Jo Sharples,  CIO, DC Solutions, Aon, said: “We believe that investing in private assets will benefit pension scheme members by delivering better expected returns over the long-term, ultimately resulting in higher retirement outcomes. The new Mansion House Accord is a great step forward in achieving this and is a fantastic example of how the UK pensions industry can work together to break down barriers to enable greater investment in private assets.”

Ben Pollard, CEO, NatWest Cushon said: “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. But there is another positive angle – reconnecting people with the investments their pension is making. These types of investments are real and tangible and show savers how hard their money is working to improve their standard of living in the UK.

Andy Briggs, Phoenix Group CEO, said: “This Mansion House Accord will unlock investment in UK private markets while helping deliver better long-term returns and retirements for millions of pension savers. The new commitments have the potential to strengthen the economy by fuelling the growth of British businesses and boosting investment in critical infrastructure.
“Phoenix Group has already taken a lead by launching Future Growth Capital — the first private market investment manager formed to deliver the commitments made in the initial Mansion House Compact — committing £2.5bn over three years to the UK’s most exciting, innovative and fastest growing companies. The Accord is the natural next step, and we’re proud to play our part in delivering better outcomes for our customers and for the wider society.”

Steve Charlton, a member of SPP’s DC Committee and DC managing director at SEI, said: “Due to ongoing collaboration and open dialogue between the industry and the UK government, we have become comfortable with the proposed changes to the Mansion House reforms. This accord demonstrates our collective ambition to have a consolidated workplace pension environment that provides flexibility and choice for pension funds to invest where they see opportunity, whilst balancing their responsibility to members.”

Nest CIO Liz Fernando said: “As a scheme committed to investing at scale in private markets, as well as in the UK, we are pleased to join colleagues from across the industry in this significant initiative.

“We currently have around 15 per cent of our assets under management in private markets, and an ambition to increase this to 30 per cent in the coming years. Around 60 per cent of this private market allocation already is in the UK. Our members are UK workers, and we want to invest in their communities and the infrastructure they use, to help drive the UK economy.

“We are confident our approach will help drive substantial positive impact for our members and the UK, and we continue to foster partnerships that help us tap into the great investment opportunities on our doorstep.”

David Lane, chief executive of TPT Retirement Solutions, said: “By reaching an agreement with pension providers to invest in UK productive finance in a mutually beneficial way, the Government can achieve its objective and support better outcomes for scheme members. Many pension schemes already invest in productive finance, and most are open to investing more in the UK. Investment in assets such as infrastructure, transportation, housing, venture capital and private markets can play an important role in improving risk-adjusted returns for members while also contributing to economic growth.

“Meeting the Government’s objectives while also maintaining fiduciary duty and ensuring strong returns for members are not mutually exclusive ambitions. However, hurdles remain around value for money considerations and the availability of suitable investment opportunities. These should be a focus for Government policy to spur more investment. The most pressing issue to deal with is that provider pricing practices leave very little room in the annual management charge for investment fees. There needs to be a shift to a value for money approach that considers the returns from an investment and not just its fees.”

Benoit Hudon, CEO and chairman of Mercer UK said: “As founding signatories on the first Mansion House Compact, it’s positive to see more firms signing up to this extended ambition. Having the flexibility and ambition to invest into initiatives that bolster UK economic growth has the potential to benefit communities, help put more money in people’s pockets and support public services and indeed the broader economy. We are pleased to have had the opportunity to work closely with government and other stakeholders to agree the joint commitment needed to make this initiative a success.”

Now: Pensions CEO Patrick Luthi said: “Byinvesting in appropriate UK Private Market opportunities, we can together achieve alignment of our member’s long-term interests, with UK growth and benefits to society more broadly. Shortly we will make our first investment into UK private markets, focusing on affordable housing. Alongside Mercer, we look forward to continuing to work with Government to promote the right environment to invest in private markets and the UK.”

Patrick Heath-Lay, CEO of People’s Partnership, provider of People’s Pension, said: “People’s Pension has a vital role to play in the exciting, shared vision for the future of the pensions’ industry, which will see bigger, stronger, value-driven schemes that will deliver better value to their members. By signing this Accord, we are reaffirming how seriously we take our commitment to delivering better outcomes, as well as helping to drive UK economic growth.”

Dan Mikulskis, Chief Investment Officer of People’s Partnership, said: “As well as signing the Accord we have taken real, concrete steps to build the internal capability, and leverage our scale, to invest in private market assets in a way that leaves value in the hands of members and not asset managers.”

Amanda Blanc DBE, Aviva group CEO, said: “This is a major opportunity for the pension and investment industry to support UK growth while delivering improved outcomes for pension savers. 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.”

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