The Mansion House ‘compact’ will be unveiled this evening by Chancellor Jeremy Hunt, outlining a new strategy to boost returns for UK-defined contribution (DC) pension systems while unlocking £50bn of capital investment in unlisted equities.
The government is moving forward with a number of initiatives to boost the percentage of defined contribution pension funds invested in private equity and other illiquid assets.
Multiple firms have pledged to employ diverse investment vehicles to reach a minimum 5 per cent allocation in unlisted equities through DC Master Trust pension funds by 2030.
These major pension providers are set to announce their pledges later today following Hunt’s speech.
LCP partner Stephen Budge says: “Members of DC pension schemes rightfully deserve the best investment strategy to maximise the potential value of their savings at retirement.
“So it’s great to see initiatives such as this challenging trustees and industry on supporting access to potential return drivers outside of the traditional asset classes, ones which can deliver meaningful change for members and which are much more commonly accessed in DB pension schemes and DC schemes in other countries.
“We think this initiative provides a great opportunity to make a real difference to members’ retirement savings.”
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