What is Mansion House Accord and how it helps scale up UK investments?
As part of the Mansion House Accord effort, pension plans and providers have committed to increasing their investment in private British companies.
Mansion House Accord effort
The Pensions and Lifetime Savings Association, the Association of British Insurers, and the City of London Corporation will work together to increase the amount of money allocated to high-growth investments under the agreement, which was the result of former chancellor Jeremy Hunt’s Mansion House changes.
A minimum of 10% of defined contribution default funds will be distributed to the private markets by the 17 participating groupings under the Accord, with at least half of that amount going to UK companies by 2030.
The Mansion House Compact
The Mansion House Compact, which was established in 2023 and saw 11 providers commit 5% of their defined contribution default funds to venture capital and private equity, is expanded by the Mansion House Accord.
According to the British Private Equity and Venture Capital Association (BVCA), signatories to the compact presently own about £800 million in unlisted equity assets in their defined contribution default funds, which represents 0.36% of the funds’ total value.
As the government seeks to improve the tech industry’s fortunes, the additional money allocated to UK private firms will greatly increase the amount of funding available for startups, expanding the options accessible to private companies.
“If the signatories fulfil their obligations, this agreement could be a huge step forward for the UK economy,” stated Michael Moore, chief executive of BVCA.
The retirement funds of foreign pension savers are currently the main beneficiaries of innovations developed by forward-thinking British businesses. The creation of rapidly expanding British businesses working in future-oriented industries including health sciences, artificial intelligence, and net zero is supported by UK venture and growth funds.
“For this reason, we appreciate the signatories’ guarantees that the Accord upholds the pension industry’s commitment to boosting investment in UK venture and growth equity funds, even as they broaden their focus to new areas like infrastructure.”
