Twenty of the UK’s biggest pension providers and insurers are set to launch a new investor-led partnership on Tuesday.
The Sterling 20 will be established at the Regional Investment Summit in Birmingham on Tuesday, working with the Government and City of London Corporation.
The initiative will help to boost affordable housing, improve broadband connections in rural areas and provide scale-up finance for growing businesses, the Government said.
L&G (Legal & General) has kicked off the investment drive with a £2 billion commitment by 2030, delivering around 10,000 more affordable homes and supporting the creation of 24,000 jobs nationwide, the Government said.
Nest will also provide Schroders Capital with £500 million – of which £100 million is expected to be channelled into UK investments in the coming years. In addition, Nest will invest £40 million, helping to deliver reliable broadband to rural homes and businesses.
Chancellor Rachel Reeves said: “This is about getting Britain building again – bringing our savings, our investors and our regions together to deliver the homes, infrastructure and industries that will drive growth and create good jobs in every corner of the country.
“Our country’s pension funds are some of the biggest in the world. When they invest in Britain, everyone benefits – from the construction worker on site, to the small business on the high street, to the saver seeing their pension grow. Sterling 20 shows what can be achieved when we all pull in the same direction to build a stronger economy that works for, and rewards, working people.”
Antonio Simoes, group chief executive, L&G, said: “Our £2 billion commitment, targeted at housing, infrastructure, and urban regeneration, will help unlock the investment needed in productive assets across the country – creating jobs, strengthening communities, and driving both regional and national growth.
Ian Cornelius, chief executive of Nest, said: “Every decision we make puts our members and their long-term outcomes first. We believe private assets can play a key role in delivering strong, consistent returns for them.
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“That’s why the UK, with its exceptional investment opportunities, is a cornerstone of our strategy. From major infrastructure projects to ambitious small businesses, our investments are helping support economic growth across the country.
“We have already committed around £4 billion to UK private markets, and by 2030 we expect this to rise to around £12 billion. A strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy.”
Alastair King, Lord Mayor of London, said: “The Mansion House Accord marked a pivotal step in pension investment reform – building on the foundations of the Mansion House Compact and signalling a clear industry commitment to channel investment directly into UK growth.
“This next stage transforms commitment into deployment by uniting the UK’s leading investors around a shared vision and coordinated strategy with Government.
“British enterprise, from AI to renewable energy and infrastructure, is primed for investment. The Mansion House Accord signatories have stated their intent to deliver on the Accord’s promise to give British savers a meaningful stake in Britain’s growth while increasing returns.”
The Regional Investment Summit will also see the AustralianSuper, Australia’s biggest pension fund, increase its investment into the UK housing market, the Government said.
The fund will meet the Chancellor at the summit, and ahead of this, AustralianSuper has announced a new UK living investment platform dedicated to investment in rental homes.
Damian Moloney, deputy chief investment officer at AustralianSuper, said: “As the launch of our new £500 million UK living platform demonstrates, AustralianSuper continues to view the UK as a key global investment destination. With the fund on track to grow its UK assets to £18 billion by 2030, we look forward to further facilitating investment between the two countries for the benefit of members.”
Pensions minister Torsten Bell said: “Our pensions system is one of the UK’s great strengths. We’re stepping up the pace of pension reform to support not just British pension savers but the British economy, supporting investment to deliver the growth of communities up and down the country.”
The members of the Sterling 20 are Aegon; Aon; Aviva; L&G; LifeSight by WTW; Mercer; M&G; NatWest Cushon; Nest Corporation; NOW Pensions; People’s Partnership; Phoenix Group; Royal London; Smart Pension; SEI; TPT; USS – Universities Superannuation Scheme; Rothesay; PIC – Pension Insurance Corporation; PPF – Pension Protection Fund.