Mansion House Compact progress has slowed to a crawl nearly three years after 11 of the UK’s largest pension providers pledged to channel billions into unlisted companies, with the industry now openly questioning whether the 2030 target is deliverable. According to the Association of British Insurers’ October 2025 progress update, signatories had committed £1.6 billion to unlisted equities within their defined contribution default funds as of February 2025, up from £0.8 billion a year earlier, out of a total DC default fund value of £268 billion.
That figure represents just 0.6 per cent of total assets, a 0.24 percentage-point year-on-year gain. The compact requires signatories to reach 5 per cent in unlisted equities by 2030.
Mansion House Compact Progress Stalls on VC Commitments
The gap between ambition and action is sharpest in venture capital. UK Private Capital, which surveyed 83 venture capital and growth equity firms between 9 April and 7 May 2026 after contacting 130 in total, found only two legally binding commitments to VC funds from UK default funds aligned with the compact.
Its survey found that 48 per cent of VC and growth equity respondents were not optimistic that Mansion House agreements will deliver greater investment by 2030. Just 20 per cent were optimistic.
UK Private Capital’s latest data also shows that British private capital received 16.5 times more foreign investment than domestic investment in 2025, underlining the structural mismatch the compact was designed to correct.
Michael Moore, chief executive of UK Private Capital, said: ‘It is clear the pace must increase significantly for Mansion House Compact signatories to meet their commitments. It is essential that there is greater urgency in accelerating progress so that pension savers can benefit from more diversified portfolios and the stronger returns offered by the asset class.’
Client appetite is also cooling. The ABI’s update showed seven out of 11 signatories said clients appeared supportive of increasing unlisted equity allocations in 2024. By 2025, that number had fallen to four, with cost concerns cited as the primary drag.
Cultural and Regulatory Barriers Cited by Signatories
Tim Levene, chief executive of Augmentum Fintech, attributed the slowdown to a cultural lag. ‘When you’re backing early-stage businesses it takes time…not just for the money to flow, but for the money to become productive as well,’ he said. ‘There needs to be a real cultural and capability shift.’
Levene also pushed back on risk concerns, arguing: ‘There’s no shortage of managers. There is a shortage of pension funds willing to back the managers.’
Joanna Sharples, chief investment officer of DC solutions at Aon, said venture capital sits at the higher end of the risk/return spectrum, but expects to see a shift towards areas including venture over the next few years.
Lorna Blyth, managing director, investment proposition at Aegon, said: ‘While we have made meaningful progress, we remain concerned about the timeline to the 2030 Mansion House Compact target. Key regulatory building blocks are still not fully in place, including alignment on performance fees and greater clarity on Conditional Permitted Links.’
Several signatories called for alignment between the Financial Conduct Authority (FCA) and the Pensions Regulator on performance fees, while others urged the government to expand domestic investment opportunities.
The compact itself had nine founding signatories, including Aviva, Legal & General, Nest and Aegon, with Aon and Cushon joining subsequently, according to IPE.
A Newer, Broader Pledge Alongside the Original
The industry’s response to flagging momentum has been partly structural. On 13 May 2025, a new voluntary initiative called the Mansion House Accord was announced, with 17 of the largest workplace pension providers committing to invest at least 10 per cent of their DC default funds in private markets by 2030, with 5 per cent of the total ring-fenced for the UK.
The Pensions UK Mansion House Accord was jointly led by the Association of British Insurers, Pensions UK and the City of London Corporation. Its 17 signatories include Aegon UK, Aviva, Legal & General, Nest, Phoenix Group, Royal London, Smart Pension and the Universities Superannuation Scheme (USS), among others. Total pension assets in scope amount to at least £252 billion.
The Accord sits alongside rather than replacing the original compact, raising questions about whether commitments are multiplying faster than capital is actually deploying.
Some deployment has occurred. Smart Pension invested £330 million in Octopus Energy Generation, Nest allocated £200 million to venture capital, and Mercer committed £350 million in the first year of a bespoke private markets vehicle run with Schroders. The ABI acknowledged the journey requires ‘significant market, policy, regulatory and operational development.’
The Value For Money framework, due to take effect from 2028, may supply a harder lever. It will require pension schemes to measure and publish performance against market leaders, assessed on investment returns, costs, charges and service quality. Pensions minister Torsten Bell said the framework will stop ‘funds sitting in schemes that aren’t working hard.’ The UK Private Capital investment compact has long argued that without such structural pressure, voluntary pledges alone will not shift pension capital at the pace the market needs.
