People’s Partnership – the UK’s provider of The People’s Pension to more than 6.7 million people – has confirmed it is making a moving toward investing in UK assets, including infrastructure and real estate.

In response to the government’s first consultation on the pension review, People’s Partnership said it is reaching the necessary scale, as well as developing the in-house capabilities that are needed to invest in assets such as infrastructure and real estate.

The first phase of pension review aims to boost investment, increase pension pots and tackle waste in the pensions system, highlighting three main areas: scale and consolidation; costs versus value; and investing in the UK.

The provider of The People’s Pension, which manages £29bn of assets, has said that investing in UK assets “in a way that leaves maximum value in the hands of members” is part of a long-term plan for the future of the business and People’s Pension already invests 14% of its main investment fund in both UK listed companies and government debt.

Dan Mikulskis, chief investment officer at People’s Partnership, confirmed the provider is currently in the process of hiring investment team members to “make this possible”.

He added that People’s Partnership is also advancing work with commercial asset managers as well as asset owner peers, with a view to putting “top-class” proposals in front of trustees to allocate a portion of its assets to private markets.

“We believe that with our own asset ownership capabilities in place we will continue to deliver fantastic value to members’ pensions,” he said.

Mark Condron, chair of The People’s Pension trustee board, added that the provider has been looking at private markets “for some time” and is now approaching scale where it will be able to invest “effectively”.

He said that investing in such assets has always been “dependent on schemes such as ours reaching scale”.

“The business is building a team of specialists that will enable us to overcome some of the hurdles we have faced with accessing private markets in a way that maximises value for members,” he said, adding: “We remain committed to the fund having a positive impact both on our members as well as the UK economy.”

Mansion House Compact

In July 2023 the-then chancellor of the exchequer Jeremy Hunt announced a number of reforms targeted at using pension assets to drive UK economic growth. This included a Mansion House Compact calling on signatories to allocate at least 5% of their default funds to unlisted equities by 2030.

The initial signatories of the compact included Aviva, Scottish Widows, Legal & General, Aegon, Phoenix, NEST, Smart Pension, M&G and Mercer. Since then, Aon and Cushon have also joined the list.

And while the commitment is voluntary, in March 2024 Hunt also announced plans to make pension schemes disclose their level of investment in the UK in order to drive the growth in the amount of pension investment entering the UK economy.

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