​UK’s largest pension funds back regional investment drive through ‘Sterling 20’

The investor-led group will be unveiled at Tuesday’s (21 October) Regional Investment Summit in Birmingham. The institutional investors will work with the government and the City of London Corporation to boost regional growth and invest in key sectors such as artificial intelligence, fintech, and renewable energy.

The move builds on the Mansion House Accord agreed in July, under which 17 providers representing 90% of active defined contribution (DC) scheme savers committed to invest at least 5% of their main default funds in UK private markets. The government said the latest initiative could unlock billions for new housing, infrastructure, and high-growth industries.

“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.”

Rachel Reeves

Chancellor of the Exchequer 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.”

Torsten Bell, the pensions minister, added: “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.”

L&G and Nest lead the charge

To coincide with the launch of the Sterling 20, Legal & General (L&G) has announced a £2bn commitment aimed at delivering around 10,000 affordable homes and creating 24,000 jobs nationwide by 2030.

In a statement, L&G said the programme would “enable local and combined authorities to unlock their ambitions to drive local economic growth and respond to local needs, such as affordable housing, knowledge economy hubs, infrastructure, retrofitting homes, and regeneration”.

The £2bn investment will be spread across the UK “based on local needs and demand, ensuring that every project supports L&G’s dual purpose of delivering both financial returns and positive societal outcomes”, the financial services giant said.

António Simões, group chief executive at L&G, added that the commitment would “help unlock the investment needed in productive assets across the country – creating jobs, strengthening communities, and driving both regional and national growth”.

“A strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy.”

Ian Cornelius, Nest

Separately, Nest has invested £500m with Schroders Capital, part of which will go towards UK private equity investments. It also announced its first investments made through a global infrastructure debt fund run by IFM Investors, both of which are UK companies.

Ian Cornelius, chief executive of Nest, said: “We believe private assets can play a key role in delivering strong, consistent returns… We have already committed around £4bn to UK private markets, and by 2030 we expect this to rise to around £12bn.

“A strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy.”