Twenty large pension providers and funds will form an investor initiative called ‘Sterling 20’ at the Regional Investment Summit in Birmingham on Tuesday, with Legal & General committing £2bn and Nest £500m. In addition, AustralianSuper has launched a £500m UK Living Platform as part of its five-year plan to place £8bn in the UK. 

Working with the government and City of London Corporation, the investors will “channel the nation’s savings into key infrastructure and fast growing businesses” in sectors including AI and fintech.  

As part of the Sterling 20 and Mansion House drive, L&G has said it will pour £2bn into affordable housing by 2030.  

Master trust Nest, via Schroders Capital, will invest £500m; about a fifth of this is expected to go towards UK assets, according to the Treasury. On top of this, Nest set to invest £40m to deliver gigabit-capable fibre broadcast to remote areas in Scotland and the North of England.    

Chancellor Rachel Reeves said: “This is about getting Britain building again – bringing our savings, our investors and our regions together to deliver the homes, infrastructure and industries that will drive growth and create good jobs in every corner of the country.”  

She added: “Our country’s pension funds are some of the biggest in the world. When they invest in Britain, everyone benefits – from the construction worker on site, to the small business on the high street, to the saver seeing their pension grow. Sterling 20 shows what can be achieved when we all pull in the same direction to build a stronger economy that works for, and rewards, working people.” 

The latest initiative provides the chancellor with an opportunity to make an announcement at Tuesday’s event. 

Nest believes private assets can play a key role in delivering strong, consistent returns, said CEO Ian Cornelius. “That’s why the UK, with its exceptional investment opportunities, is a cornerstone of our strategy,” he said.   

The master trust has committed about £4bn to UK private markets and expects this to reach £12bn by 2030.   

However, Cornelius stressed that “a strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy”.   

The Mansion House Accord, under which providers pledged to invest 10% of default assets in private markets including 5% in the UK, also came with a caveat of there being suitable opportunities.  

The Sterling 20 initiative is very similar to the Mansion House Accord agreed by defined contribution providers earlier this year and involves all 17 signatories, as well as Rothesay, Pension Insurance Corporation and the Pension Protection Fund. The 20 investors and AustralianSuper will work with the Office for Investment. With the British Growth Partnership also raising funds from pension schemes, the sheer number of initiatives to get institutional capital into UK private assets risks creating confusion.  

Lord mayor of London Alastair King said that following on from the Mansion House Accord, “this next stage transforms commitment into deployment by uniting the UK’s leading investors around a shared vision and coordinated strategy with government”.  

Lobby group Pensions UK also cited the Accord. Zoe Alexander, executive director of policy and advocacy, said: “Pensions UK has long called for greater momentum to build the pipeline of suitable assets to enable schemes to deliver on the Accord. We are pleased, therefore, to see the Office for Investment showing leadership to drive what we hope will be a productive dialogue and improve access to UK assets that work for schemes and their memberships. We are also pleased that the Local Government Pension Scheme will be involved in these discussions, given its critical role in the UK economy and successful record of local investment.”  

At the Regional Investment Summit, Australia’s largest superannuation fund will also be present. AustralianSuper has announced a £500m UK living investment platform dedicated to investment in rental homes as part of its ambition to invest £8bn in the UK over the next five years.   

Australian supers have been allocating to UK real assets for some time as part of their diversified investment programmes. In 2023, IFM Investors, an asset manager owned by supers as well as Nest, pledged to invest £10bn in the UK.   

Pensions minister Torsten Bell said: “Our pensions system is one of the UK’s great strengths. We’re stepping up the pace of pension reform to support not just British pension savers but the British economy, supporting investment to deliver the growth of communities up and down the country.”    

The members of the Sterling 20 are: Aegon; Aon; Aviva; L&G; LifeSight by WTW; Mercer; M&G; NatWest Cushon; Nest Corporation; Now Pensions, owned by Mercer; People's Partnership; Phoenix Group; Royal London; Smart Pension; SEI; TPT; Universities Superannuation Scheme; Rothesay; Pension Insurance Corporation; and the Pension Protection Fund.