Mansion House Compact to Increase Investment in Unlisted Equities

Posted on 07/24/2023

An announcement has been made under the UK’s Chancellor of the Exchequer Jeremy Hunt. The new project is called: The Mansion House Compact. According to the signatories: “Nine founding signatories, who make up around two-thirds of the Defined Contribution Pensions market and over £400 billion in assets, made a voluntary commitment to take action to achieve better outcomes for UK long-term savers.”

How will this be done?: “This will be achieved by facilitating access to higher potential net returns that can arise from investment in unlisted equities.” Signatories will: 1. Increase the proportion of UK pension and other relevant assets, including DC default funds, invested in unlisted equities, and 2. Allocate at least 5% of DC default funds to unlisted equities by 2030.

Signatory M&G said: “M&G’s heritage is in investing in private markets, whether it is through infrastructure, real estate or innovative companies with purpose. We are democratising access to private markets through the Prudential With Profits Fund, and are supportive of Defined Contribution pension reforms that encourage more investment of this kind that has potential to result in positive outcomes for savers.”

The Mansion House Compact is an industry-led voluntary expression of intent to take meaningful action to secure better outcomes for UK savers through increased investment in unlisted equities. The Compact is a non-legally binding initiative. The founding signatories are Aviva, Scottish Widows, Legal & General, Aegon, Phoenix, NEST, Mercer, M&G, and Smart Pension. Signatories are expected to take meaningful action within 12 months of signing the Compact and stay on track to aim to have allocated at least 5% of defined contribution default funds to unlisted equities in a way that is consistent with the best interests of their savers by 2030.

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