UK's biggest pension fund pushes deeper into VC with $1.3B target

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Workplace pensions supplier Nest is readying to allocate up to £1 cardinal (about $1.3 billion) to VC by 2030 arsenic UK efforts to funnel pension assets into backstage markets ramp up.

The £68 cardinal fund, which is the UK's largest by rank with much than 14 cardinal members, volition initially perpetrate £200 cardinal to Schroders Capital to enactment existing investments and supply caller backing for late-stage companies.

Included successful Nest's caller VC portfolio are AI video startup Synthesia and autonomous driving startup Wayve, which is acceptable to behaviour an $85 cardinal worker stock merchantability connected the London Stock Exchange's backstage markets platform, Pisces, connected Wednesday.

The UK's task marketplace is acceptable for important maturation this year, with £14.4 cardinal invested truthful far, according to PitchBook data. At the existent pace, woody worth for 2026 is projected to summation by much than 50% from past year, but UK pension funds person historically been connected the sidelines.

"The UK is already Europe's largest task hub, and the world's 3rd largest," Tim Creed, caput of backstage equity investments astatine Schroders Capital, said. "It is 1 of the astir businesslike task ecosystems globally, increasing unicorns astatine pace. However, home superior has not historically participated astatine the aforesaid rate. The UK has a important and mostly untapped accidental to bring this maturation to pension portfolios."

Nest is readying to summation its allocation to backstage markets to 30% of AUM by 2030 from 19%, successful enactment with a broader propulsion crossed the pensions manufacture to summation vulnerability to backstage markets.

Bringing much pension assets into backstage markets has been a cardinal absorption for successive governments, starting successful 2023 with the Mansion House Compact nether the Conservative government. At the time, 9 of the UK's largest defined-contribution pension schemes agreed to put up to 5% of their default funds successful unlisted equities by 2030.

Last year, nether the Labour government, 17 workplace pension providers signed a caller statement committing astatine slightest 10% of their assets, which the UK Treasury estimated would unlock £50 cardinal for backstage marketplace investments.

According to the Association of British Insurers, signatories of the Mansion House Compact accrued their default funds' concern successful unlisted equities from £800 cardinal successful 2024 to £1.6 cardinal past year.

In the latest UK argumentation move, the Pension Schemes Act 2026 was passed successful April to consolidate smaller providers and boost concern returns. The instrumentality includes a proviso giving the authorities the powerfulness to necessitate DC providers to deed Mansion House Accord targets, though it can't beryllium utilized earlier 2028 and comes with respective safeguards.

This nonfiction primitively appeared connected PitchBook News