Pension providers and single employer schemes are set to sign up to a new pledge to invest 5 per cent of their assets in UK private markets, according to sources.
Believed to be dubbed ‘the Mansion House Accord’, the new agreement is expected to see schemes signing up to allocate 10 per cent of their assets to private markets, double the figure of the original Mansion House Compact of two years ago, potentially resulting in a £50bn cash injection into UK PLC. Unlike the Mansion House Compact, the Mansion House Accord does have a commitment to invest in private markets in the UK. Its remit is also broader than the original pledge, including private credit and infrastructure as well as the private equity commitment.
The announcement is understood to be pencilled in for Tuesday 6th May 2025.
After a fierce period of negotiations, signatories are expected to be different to those signed up to the Mansion House Compact. One source told Corporate Adviser that the number of signatories will be higher than that of the original compact, potentially around 20, with single-employer trusts potentially signing up this time.
Steve Webb, partner at LCP and former pensions minister said: “The Mansion House Compact had several flaws. There was no requirement that the 5 per cent private markets allocation be in the UK, and progress on implementation by 2030 had been slow. It was not happening in the straight line that had been hoped for.”
Reaction to the rumoured announcement has been mixed, with a number of commentators seeing the proposed intervention as an interference with fiduciary duty. There is believed to be no equivalent commitment drawn in relation to non-workplace pensions, including Sipps and personal pensions.
But Webb says achieving 10 per cent allocations, in a non-contractual accord, is a loose commitment. He said: “There is no shock that the government is trying to encourage UK investment. They can increase disclosure requirements, publish league tables and name and shame providers.
“Ten per cent is pitched at a level where it is not much of a stretch anyway. And once you have targets, it will induce supply. Schemes will know they have to do it, and managers will be motivated to target them.”
