Cushon has signed the Mansion House Compact, an industry initiative which aims to increase the proportion of UK pension assets, including Defined Contribution (DC) default funds, invested in unlisted equities.
Cushon’s current default fund allocates 15 per cent to private markets, covering unlisted equities, infrastructure, real estate, and natural capital. A 25 per cent–45 per cent allocation, or 3.75 per cent–6.75 per cent, is the goal for unlisted stocks within this range.
The Mansion House Compact is a voluntary commitment by DC pension funds to enhance financial outcomes by accessing higher potential returns from unlisted equities in diversified portfolios, aligned with the interests of UK long-term savers.
Since the summer of 2022, Cushon’s Sustainable Investment Strategy has allocated a sizeable percentage of its default fund to illiquid assets in the UK DC Master Trust industry. Cushon says this approach, which achieved a 64 per cent reduction in comparison to the industry standard, is essential to the growth stage’s funding for the quick reduction of scope 1 and scope 2 CO2e emissions. The goal is an 80 per cent decrease by September 2030.
Chancellor of the Exchequer Jeremy Hunt says: “I am delighted that Cushon has become the 11th signatory of the Mansion House Compact. This adds more momentum to the government and industry’s collective mission to bolster retirement incomes for pension savers and turbocharge the growth of our most innovative companies.”
Cushon founder CEO Ben Pollard says: “Private market assets not only present opportunities for higher returns, they also build pensions to be proud of. Investing directly in real-world assets in the UK aligned to the values of our members means we can better engage members with their savings.
“When members can see, touch, and even taste, the good that their money is doing, they are more likely to pay attention to their pension which encourages increased contributions and better planning for later life. We’re pleased to be signing the Mansion House Compact and encouraging the wider industry to include these valuable assets in their strategies.”
City of London Corporation policy chairman Christopher Hayward says: “The United Kingdom has the largest pension market in Europe with £3 trillion of assets under management, but how this money is invested is limiting returns for savers. In Australia, comparable schemes invest ten times more in private markets than UK schemes. If the UK’s DC pensions industry were to allocate 5 per cent of assets to unlisted equities, it could unlock £50 billion of investment in high growth British companies by 2030.”
