Scotland to benefit from pension funds initiative – Daily Business

A huge investment in broadband technology in Scotland is among the benefits that will come from a regional initiative by 20 of the UK’s biggest pensions and insurance companies.

Nest, which represents a third of the UK workforce, is pumping £40 million into fibre broadband in Scotland and northern England.

It is part of a new partnership called Sterling 20, a regional investment summit to be led by Chancellor Rachel Reeves in Birmingham this week.

Nest will also provide Schroders Capital with £500m – of which £100m is expected to be channelled into UK investments in the coming years.

Legal & General has made a £2 billion commitment to invest in delivering 10,000 affordable homes by 2030.

The 20 participants include Aviva, M&G, Phoenix, Royal London and the Universities Superannuation Scheme who have agreed to “channel the nation’s savings into key infrastructure and fast-growing businesses in key modern industrial strategy sectors like AI and fintech”.

AustralianSuper, Australia’s largest pension fund and the 17th largest in the world, will increase its investment into the UK housing market.   

Representatives of the fund will meet the Chancellor at the Regional Investment Summit. It has announced a new UK living investment platform dedicated to investment in rental homes as part of its ambition to invest £8 billion of new capital into the UK over the next five years. 

The Mansion House accord, announced in July, involved 17 pension providers committed to invest at least 5% of their main default funds in UK private markets. This commitment will unlock over £25 billion for new UK housing infrastructure and high-growth industries.  

All these providers have joined Sterling 20, alongside Rothesay and PIC, the annuity providers, and the Pension Protection Fund.

Subsequently, the government restructured the Office for Investment — a joint unit of the Treasury, Department for Business and No 10 — to encourage investment in Britain.

The Sterling 20 and Australian Superannuation Scheme together manage a combined £5 trillion in assets and the Treasury says that even a small shift towards investing in UK infrastructure “would unlock billions”. 

Ahead of the summit on Tuesday, Ms 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.   

“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.” 

Ian Cornelius, CEO of Nest, said:  “Every decision we make puts our members and their long-term outcomes first. We believe private assets can play a key role in delivering strong, consistent returns for them.  

“That’s why the UK, with its exceptional investment opportunities, is a cornerstone of our strategy. From major infrastructure projects to ambitious small businesses, our investments are helping support economic growth across the country.

“We have already committed around £4bn to UK private markets, and by 2030 we expect this to rise to around £12bn. A strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy.” 

António Simões, chief executive of Legal & General, said: “Our £2bn commitment, targeted at housing, infrastructure, and urban regeneration, will help unlock the investment needed in productive assets across the country — creating jobs, strengthening communities, and driving both regional and national growth.”

S&P 500 company Welltower, a US specialist investor in the healthcare infrastructure sector, is expected to announce plans to more than triple investment in the UK over the next five to ten years. It operates 299 social care properties across the UK, including Scotland.