News & Insights

Potential £75bn boost for private equity

Jason Green
Tue, 11 Jul, 2023

Chancellor of the UK, Jeremy Hunt, delivered his first Mansion House speech on Monday 10 July, unveiling reforms that present a potential £75bn boost for private equity from UK pension funds. This marks a very positive move for the private markets industry to give a growing number of investors access to the asset class.

Below is a summary of the key messages around ‘direction of travel for pensions’

  • The UK represents the largest pension market in Europe worth +£2.5tr. These reforms aim to unlock better returns for savers and more growth capital for businesses.
  • “Mansion House Pact” sees CEOs of the UK’s largest DC pension schemes committing to increase their allocations to unlisted equities to at least 5% by 2030.
  • Estimated Headline figure, if all similar schemes follow suit, unlocks an additional £50bn of capital to unlisted equities.
  • Consolidation of DC pension schemes to achieve the best outcome for members, through scaling to optimise returns. 
  • Local Government Pension schemes in focus – Consulting on both consolidating pension schemes and doubling existing pension scheme allocations in Private Equity to 10%, which would unlock a further £25bn for investment by 2030.

As the industry continues to democratise, it is vital that this is supported with a scalable yet robust approach to KYC. Many current KYC processes still rely on outdated and siloed practices that are a barrier to access. Connecting private markets fund managers with investors via a central hub is an industry-wide solution for this industry-wide challenge.

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