Smart Pension is investing £330m – 5 per cent of its default fund – into two funds looking to help transition the UK to cleaner energy sources.
Both funds are managed by Octopus Energy Generation, which invests in a number of UK renewable energy companies, including as Kensa, a leading manufacturer of ground source heat pump technology.
Smart Pension is one of the signatories to the Mansion House Accord. This move is part of a 15 per cent allocation commitment to private markets within its default fund, and reinforces its commitment to long-term sustainable investment, while helping the UK to accelerate the transition to a net zero economy.
This commitment will help finance a broad range of green energy projects, including the UK’s first investor-funded ground source heat pump network in South Wales.
Octopus Energy Generation is one of Europe’s largest renewable energy investors, with a £7bn portfolio of over 270 wind, solar, and battery projects, operating across 21 countries.
The two funds are Octopus Energy Generation – Sky (Octopus Renewables Infrastructure SCSp) and OETF (Octopus Energy Transition Fund SCSp), both of which carry the highest sustainability ratings.
As part of the investment, Smart Pension’s 1.5m members will have access to a range of materials including case studies and carbon reporting to help them understand how their pension savings are making a real difference, both financially and environmentally.
This investment was welcomed by the Chancellor of the Exchequer Rachel Reeves. She said: “Our [Mansion House] reforms are about unlocking investment to deliver higher returns for savers, drive growth, and create good jobs.
“That’s why I’m so excited about Smart Pension’s investment in the UK’s first commercially funded ground source heat pump network in South Wales, delivering returns, growth and jobs.”
Smart Group CEO and co-founder Andrew Evans adds: “As a leading workplace pension provider in the UK, we’re always looking for innovative ways to grow our members’ pensions and support the UK economy.
“That’s why we’re so proud to be investing in Octopus Energy, a fantastic British tech company, who set up next door to us when we set up our first offices a decade ago. By the end of next year, supported by innovative investments like this, we will have scaled and reached £10bn AUM.
“This collaboration will help deliver strong, long-term returns for UK retirement savers, and also will support efforts to lower household bills and reduce emissions for homeowners. It’s a great example of how UK tech businesses can come together to tackle important challenges, and create a positive impact.”
James Lawrence, director of investment proposition at Smart Pension added: “Partnering with Octopus and Kensa allows us to invest in British infrastructure to deliver measurable environmental and social impact for years to come. From renewable surplus power generation to support local leisure facilities, to cutting-edge clean tech like heat pumps, these are the kinds of investments that not only align with our own ethical standards, but also help members feel a deeper connection to their pension savings.”
