Smart Pension has become the latest master trust to announce a major allocation to private markets, two weeks after signing the Mansion House Accord.
The master trust said in an announcement today (28 May) that it planned to invest 15% of its growth fund - the main investment fund run by Smart - in private markets. It said this would amount to £4bn by 2030, based on its current projected growth.
Smart has invested in private credit since 2021. This asset class accounts for 5% of the growth fund’s assets, and the master trust said it would allocate an additional 5% to private equity and venture capital and 5% to renewable energy.
“Private markets can provide opportunities for greater and more sustainable returns for savers because they include long-term projects that have previously been inaccessible to our sector.”
Jamie Fiveash, Smart Pension
It has declined to name the asset managers who will oversee the allocation, but Smart said investments would include holdings in “critical national infrastructure, renewable energy and large-scale projects with innovative British businesses”.
Other investments will give the master trust exposure to “early stage” technology linked to industries such as agriculture, healthcare, the circular economy and the blue economy.
Managers have created “bespoke investment solutions” for Smart, each of which has been designed “without the need for high levels of liquidity”. Smart has also not made use of the long-term asset fund structure, which has been used by several other pension providers to allocate to private markets.
The investments will be initiated over the next 12 to 18 months, the master trust said, providing its members with “enhanced opportunities to benefit from UK assets… including life sciences, university spin-offs, and cutting-edge British deep tech”.
Mansion House Accord signatories to provide £25bn boost to UK investment by 2030
The Accord, signed earlier this month, saw 17 pension schemes and providers pledge to invest at least 10% of defined contribution default funds to private markets and at least half of this to UK assets by 2030. Read more
Jamie Fiveash, Smart Pension’s chief executive officer, said: “As one of the largest and fastest-growing workplace pension providers in the UK, as well as a UK fintech growth story, we are proud to commit significant capital to support large-scale projects with innovative British businesses that will drive sustainable growth for the country.
“Private markets can provide opportunities for greater and more sustainable returns for savers because they include long-term projects that have previously been inaccessible to our sector.
“We are happy to be one of the UK master trusts leading the way in this space and leave a legacy not only for our members, but also for the country’s critical infrastructure and businesses.”
Torsten Bell, the pensions minister, said in a statement: “I welcome Smart Pension going above and beyond the voluntary Mansion House Accord to deliver for savers.
“This announcement will drive more investment in infrastructure and high-growth businesses across the country, delivering growth for local communities and better returns for savers.”
