It’s one year since the signing of the Mansion House Accord, when 17 of the UK’s largest workplace pension providers signalled their intention to invest at least 10% of their defined contribution (DC) default funds in private markets by 2030, with 5% of the total – calculated to be some £25bn – allocated to the UK.
The then Lord Mayor of London, Alastair King, said at the Accord’s launch that this clear commitment to backing UK assets “includes a renewed focus on revitalising the Alternative Investment Market (AIM) of the London Stock Exchange as well as the Aquis Exchange, which play a critical role in supporting high-growth companies that drive innovation, jobs and productivity”.
The Current Landscape
At the time, the QCA welcomed pension providers allocating more of their funds to the UK. In a statement, our Chief Executive, James Ashton, also observed that “the Mansion House Accord is a missed opportunity to more explicitly back the high-growth stocks trading on AIM and AQSE that create productive jobs and power regional economies”.
One year on, that missed opportunity remains a concern. There are hundreds of small and mid-sized businesses on the public markets that have yet to see the anticipated capital inflows. While we recognize that 2030 is still some years away, the experience of the 2023 Mansion House Compact suggests that without proactive engagement, voluntary commitments can struggle to translate into tangible investment.
Constructive Engagement
We have written to all 17 signatories to understand the practicalities of the last twelve months:
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How are providers identifying opportunities on AIM and Aquis?
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What specific bottlenecks are preventing capital from reaching these markets?
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How can the QCA help signatories appraise the growth potential and robust governance of our member companies?
Our aim is to ensure the Accord remains a credible and successful initiative. To that end, we have suggested that signatories be encouraged to disclose the value of their AIM and Aquis investments as a share of their overall commitment. Transparency is the best tool we have to demonstrate that voluntary reform is working.
Working with Government
We have also shared our observations with the Pensions Minister, Torsten Bell, and the Lady Mayor of the City of London, Dame Susan Langley.
The Government’s Pension Schemes Act intends to channel capital more productively into UK businesses and includes reserve powers to ensure this shift happens. We believe the best outcome for the City is for the pensions industry to demonstrate, through action and partnership, that these powers do not need to be exercised.
A Partner for Growth
The QCA remains ready to assist signatories in navigating the unique and innovative sectors our members operate in. By working together, we can ensure that the Mansion House Accord fulfils its promise to support the great British companies that are vital to our collective economic future.
