BVCA welcomes private markets push by UK pension funds - Funds Europe

The British Private Equity and Venture Capital Association (BVCA) has formally welcomed the Mansion House Accord, a landmark voluntary agreement securing commitments from 17 UK pension funds to target private market allocations. Under the accord, participating pension providers have committed to a default allocation target of 10% to private assets by 2030, with a minimum 5% of total assets directed specifically to UK-based private capital. This initiative represents a significant policy shift aimed at channeling institutional capital into the UK venture capital and growth equity ecosystem.

The BVCA's endorsement reflects broader governmental momentum on pension fund reform. The UK Government's Pensions Investment Review and the associated Pension Bill are characterized as "encouraging steps in the right direction" by the association, which has formally responded to specific points in the government's review. The policy framework aims to address long-standing structural impediments preventing UK pension schemes from allocating capital to private markets, while simultaneously supporting economic growth and improving retirement savings outcomes for UK savers currently facing undersaving challenges.

To operationalize increased pension fund participation in private capital, the BVCA has convened the Pensions & Private Capital Expert Panel in collaboration with the pensions industry. This expert body published an interim report in September 2024, identifying specific technical, market, and policy challenges limiting pension scheme investment into private capital funds. Complementing this effort, over 100 UK venture capital and growth equity fund managers have committed to the Investment Compact, a framework designed to foster long-term and constructive working relationships with UK pension investors and develop practical solutions to industry barriers.

The BVCA's briefing on private capital and UK pension funds emphasizes that achieving the government's ambition requires "concentrated effort on all sides—from government, the pensions industry, the private capital industry, and regulatory bodies." The association has been explicit that increased investment from UK pension funds into UK private capital is vital to both driving economic growth and improving retirement prospects for UK savers. The framework represents a shift in 2025 wherein private markets have moved from a niche consideration to a central element of pension scheme investment strategy, with trustees, sponsors, and administrators increasingly evaluating private asset allocation.