The Mansion House ‘compact’ will be unveiled this evening by Chancellor Jeremy Hunt, outlining an agreement with a number of leading UK defined contribution schemes that will see them invest £50bn of capital in unlisted equities.
It is hoped this will boost investment into start-up life science, technology and fintech businesses in the UK, helping both the domestic economy and increasing returns for UK pension savers.
Hunt will expand on his “three golden rules” for the economy in his speech, expanding on the Edinburgh Reforms he announced at the end of last year.
Several initiatives are being put into place as part of the government’s efforts to raise the percentage of defined contribution pension funds allocated to private equity and other illiquid assets.
Multiple firms are therefore expected to employ diverse investment vehicles to reach a minimum 5 per cent allocation in unlisted equities through DC master trust pension funds by 2030.
These major pension providers are set to announce their pledges to this initiative later today following Hunt’s speech.
LCP partner Stephen Budge says: “Members of DC pension schemes rightfully deserve the best investment strategy to maximise the potential value of their savings at retirement.
“So it’s great to see initiatives such as this challenging trustees and industry on supporting access to potential return drivers outside of the traditional asset classes, ones which can deliver meaningful change for members and which are much more commonly accessed in DB pension schemes and DC schemes in other countries.
“We think this initiative provides a great opportunity to make a real difference to members’ retirement savings.”
