Welcoming the Mansion House Accord: a new era for UK investment

The recent launch of the Mansion House Accord marks a significant milestone for the UK pensions industry, promising to mobilise substantial investments for UK markets by 2030. This voluntary initiative, spearheaded by the Pensions and Lifetime Savings Association (PLSA), the Association of British Insurers (ABI), and the City of London Corporation, builds on the 2023 Mansion House Compact and aims to provide better returns for defined contribution (DC) savers while boosting domestic investment.

The Accord involves 17 pension schemes and providers expressing an intent to allocate a minimum of 10% of DC default funds (at least £50 bn) to private markets across all main DC default funds by 2030, with at least half of that going to UK private markets. This ambitious move is set to revitalise the UK's investment landscape, focusing on infrastructure, private equity and other high-growth sectors.

At Simmons & Simmons, we welcome this initiative and recognise its potential to transform the UK's investment ecosystem. Our firm has long been at the forefront of advising on Long Term Asset Funds (LTAFs), which are crucial vehicles for facilitating investment by DC schemes in private markets. With our deep expertise in regulatory frameworks and investment strategies, we are well-positioned to support pension schemes and fund managers in navigating the complexities of LTAFs and maximising their investment potential.

The Mansion House Accord underscores the importance of collaboration between industry and government to ensure a robust pipeline of investable assets. As highlighted by key figures, the Accord represents a bold step towards unlocking billions for major infrastructure, clean energy, and innovative start-ups.

The success of this initiative is contingent upon supporting actions by the government, including facilitating investment opportunities and tackling regulatory barriers to investments. We are pleased to hear that these actions will include aligning the scope of the charge cap and providing clarity through associated rules and guidance, aligning the value for money framework and delivering changes to rules on bulk transfers without consent.

As the UK government continues to support the industry's ambition through legislative and regulatory measures, we remain dedicated to providing expert guidance and strategic insights. Our team is ready to assist clients in leveraging the opportunities presented by the Mansion House Accord, ensuring that investments are made in the best interests of savers while contributing to the UK's economic prosperity.

The Mansion House Accord is a testament to the collective ambition of the UK pensions industry to drive domestic investment and secure better investment returns for savers. At Simmons & Simmons, we are proud to be part of this transformative journey, offering unparalleled expertise in LTAFs and supporting our clients in achieving their investment goals.