now:pensions, part of the Cardano Group and a business of Marsh McLennan (NYSE:MMC), has announced its first step into private markets with an investment aimed at supporting affordable housing across the UK. As the workplace pension provider for more than two million savers, this marks a significant milestone in now:pensions’ long-term investment strategy.
This move aligns with the provider’s commitment under the Mansion House Accord, pledging to allocate at least 10% of the default fund to private market assets by 2030, with no less than 5% invested in UK-based opportunities.
The investment is designed to deliver improved long-term returns for members while supporting socially impactful initiatives. now:pensions aims to enhance retirement outcomes and promote financial wellbeing through responsible capital deployment.
The capital will be directed towards increasing the availability of affordable homes in areas of acute demand. With over a million people currently on social housing waiting lists and the average age of first-time buyers now at 34—a 30% rise since 2007—the need for accessible housing is urgent. In London alone, residents typically spend 47% of their disposable income on rent, compared to the national average of 34%.
This investment will allow now:pensions to gain exposure to residential properties designated as affordable and deliver long-term, stable, inflation-linked returns. Specifically, it will support the development of three types of affordable housing:
- Regulated rentals, for people on the social housing waiting list and receiving a housing benefit.
- Local affordable rentals, designed for people priced out of the local rental market; and
- Shared Ownership models, for people who cannot afford a home in the local market.
now:pensions’ investment into affordable housing marks the first stage in the pension provider’s private markets strategy, and the Trustee is currently researching other suitable investments that would benefit its members.
Commenting on the announcement, Joanne Segars OBE, Chair of now:pensions’ Board of Trustees, said: “This is our first investment into private markets. Investing in affordable housing presents an opportunity to generate strong financial returns for our members while contributing to a vital social need. The now:pensionsTrustee will continue to explore opportunities to expand its exposure to private markets, with a particular focus on sectors that offer strong growth potential and align with the long-term needs of our members.”
Martyn James, now:pensions’ Director of Investment, adds: “This investment is expected to provide complementary return drivers compared to more traditional parts of the growth portfolio, providing good diversification. Our investment strategy remains focused on delivering long-term value, and we are confident that our diversified approach, which includes an ambition of at least a10% allocation to private markets by 2030, will continue to benefit our members’ retirement savings.”
now:pensions is a UK master trust, managed by an independent Trustee. The Trustee believes that incorporating environmental, social and governance (ESG) factors, as well as real-world sustainability impact.
