Schroders and Phoenix Group have announced a partnership to funnel up to £20bn of pension cash into private markets.
It said Future Growth Capital, announced on July 31, will aim to deploy up to £2.5bn over three years from Phoenix Group, in line with its Mansion House Compact which called on providers to voluntarily commit 5 per cent of funds to unlisted equities by 2030.
The partnership has committed to an initial £1bn and said it will deploy between £10-20bn over the next 10 years into UK and global private markets.
Andy Briggs, group CEO at Phoenix Group, said: “By forming FGC with Schroders, it will help us to deliver our goal of giving UK long-term savers a way to invest in a more diversified portfolio with the potential for higher returns, from a broader range of assets.
"This facility will also play a significant role in the future design of our flagship defaults. FGC will be a long-term, patient capital investment manager, constructed to ensure that customer protection remains at its core by taking a blended approach to asset allocation.”
The new investment manager, which is subject to regulatory approval, will design and manage UK and Global multi-private asset solutions for UK insurance and pension clients.
Its aim is to open access to a broader range of innovative companies and investment opportunities for UK pension clients
Schroders CEO, Peter Harrison, said: "The UK’s private companies are an untapped universe of investment opportunity. By stimulating investment into our private markets, our partnership will address the multiple challenges of the looming retirement crisis and boosting UK growth.
"By connecting long-term savers with our country’s most inventive companies, Future Growth Capital will help more people to fund a secure and comfortable retirement, whilst supporting businesses to grow and thrive right here in the UK. In doing so, we’ll be making the UK an even more attractive place to live, work, retire and invest.”
The announcement was welcomed by chancellor Rachel Reeves.
She added: "We want pension fund money to work harder for people and the economy. That’s why our pensions review will explore how we can unlock even more investment in the UK economy while boosting pension pots."
tara.o'connor@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
