UK Pension Providers Invest £11bn in Private Markets

Defined contribution (DC) pension providers have invested more than £22 billion in private markets, with over half of this amount allocated to the UK, according to recent data.

The 17 signatories of the Mansion House Accord, launched in May 2024, have committed 6.6% of total DC growth-phase assets to private markets as of December 31, 2025. This information comes from the Association of British Insurers (ABI) and Pensions UK. The accord further commits providers to allocate at least 10% of growth-phase portfolios to private markets by 2030, with half of this in the UK, subject to fiduciary and regulatory duties and asset availability.

UK investments and commitments

Of the £11.1 billion invested in the UK, 72% is in property and real estate, including social and affordable housing. Additionally, the signatories pledged an extra £3 billion to UK private markets at the start of 2026.

In a joint statement, the ABI and Pensions UK noted that the 17 firms are at various stages of implementing private market investments, from boosting their internal teams to entering new asset classes and establishing new mandates.

Challenges and opportunities

The trade bodies stressed the need for a consistent supply of investable opportunities as pension schemes expand. They stated that the pipeline of UK opportunities must continue to be developed to ensure the right quantity and quality, alongside government support to overcome regulatory barriers and a focus on long-term value for savers.

Yvonne Braun, ABI’s director of long-term savings and health and protection policy, said the industry is delivering on its goal to increase investment in private markets, supporting better outcomes for pension savers and financing UK homes, infrastructure, and businesses. “However, there can be no room for complacency,” Braun added, emphasizing the need for a strong pipeline of opportunities and a shift towards long-term value for savers.

Industry perspectives

Zoe Alexander, chief policy officer at Pensions UK, highlighted the Value for Money framework and better government-public finance coordination as key to accelerating private market investment. She stressed the importance of a strong pipeline of suitable UK investments and collaborative efforts to ensure the best retirement outcomes for savers.

Mansion House Compact progress

The ABI and Pensions UK updated the progress of the Mansion House Compact, which aims for 5% of DC default funds to be invested in private equity. Unlisted equity investment in DC default funds grew by 65% in the 10 months to the end of last year, reaching £2.7 billion. Across DC portfolios, private equity investments totaled £7.5 billion. Michael Moore, chief executive of the private equity trade body UK Private Capital, described the progress as “disappointing,” noting that new investment in unlisted markets has been limited. Moore called for continued government focus to avoid missing opportunities for better pension returns and UK economic growth.