Smart Pension has joined forces with investment platform Mobius and technology and renewable specialists to explore how tokenisation could open up access to private market assets.
Octopus Energy Generation and Ctrl Alt, a tokenisation specialist, will join Smart and Mobius to launch the Tokenised Renewable Assets Coalition (TRAC). The group aims to test how blockchain-based digital ‘tokens’ of renewable energy assets could be integrated into pension schemes, to reduce costs for DC providers, boost investment into private markets and renewable infrastructure, and improve member outcomes.
Tokenisation refers to the process of creating a digital, blockchain-based representation of a real-world asset, such as a wind farm, solar park or private infrastructure fund. Given the high cost of investing in these large assets, this tokenisation effectively allows ‘fractionalisation’ – creating a large number of far smaller economic units for investors, opening up these investments to DC schemes.
These digital tokens encode ownership rights, valuation data and compliance rules, allowing assets that are normally complex and illiquid to be handled more efficiently. It is hoped this will be a benefits to DC schemes looking to invest in private assets, but who also have daily dealing requirements
While tokenisation may sound similar to issuing shares, the coalition stressed that it works very differently. Tokenised assets are not publicly traded securities. Instead, they are digitally structured units reflecting the net asset value (NAV) of the underlying asset, designed to be bought, held and valued within existing pension frameworks.
Whereas shares on stock exchanges experience market-driven price swings based on supply and demand, token values remain NAV-based, avoiding speculative volatility.
Industry advocates argue that tokenisation could significantly simplify administration, enabling near-instant settlement, automated record-keeping and far lower intermediary costs — again this is seen as a potential benefit for DC schemes in what remains a competitive market on charges.
Those launching the TRAC said tokenisation could help schemes scale such allocations more efficiently and with greater transparency.
This launch comes amid a Government push to get DC schemes to boost investments into UK-based productive finance and infrastructure.
Under the Mansion House Accord 17 workplace pension schemes have committed to allocating at least 10 per cent of default funds into private assets, of which half is to be based in the UK.
Smart Pension—one of these Accord signatories — has committed to allocating 15 per cent of its default strategy to private markets by 2030. It recently invested £330m into two Octopus renewable funds through the Mobius platform.
It says it is hoping to achieve invest its assets in these tokens by the end of 2026.
Smart Pension director of investment proposition James Lawrence says: “This collaboration will lay the foundations to help us make the innovative investments to scale, as we look to achieve tokenised AUM by the end of next year.”
He adds that this will help drive growth for the country’s critical infrastructure, and support the UK’s transition to a net zero economy.
Mobius CEO James Finch adds: “UK pensions, renewable assets and tokenisation have a huge amount to offer each other.
“Working alongside these fellow innovators provides the opportunity to explore how this combination could deliver meaningful benefits to UK savers. At Mobius we’re always expanding what’s possible in pensions, and this collaboration is a natural extension of that mindset.”
Matt Ong, founder and CEO of Ctrl Alt, said the coalition aims to demonstrate how tokenisation can unlock access to “previously hard-to-reach asset classes” by integrating blockchain infrastructure with established investment platforms and master trusts.
Matt Setchell of Octopus Energy Generation said: “Renewables are destined to be tokenised,” arguing that digital infrastructure will help channel pension capital into the energy transition while maximising value for pension savers.
