The Sterling 20, a new investor-led partnership between 20 of the UK’s largest pension funds and insurers, is set to be launch at the first-ever Regional Investment Summit taking place in Birmingham tomorrow.
The Sterling 20 will work with the government and City of London Corporation to channel the nation’s savings into key infrastructure and fast-growing businesses in key modern Industrial Strategy sectors like AI and fintech. HM Treasury has announced the latest details of this initiative earlier today.
L&G kicked off this investment drive earlier today, announcing a £2 billion commitment by 2030, which it says is set to deliver around 10,000 more affordable homes for hardworking families and supporting the creation of 24,000 jobs nationwide.
Aviva – ‘proud to back the Mansion House Accord’
Amanda Blanc DBE, Aviva Group Chief Executive Officer at Aviva has shared her positive reaction to Sterling 20 and its intentions commenting: “We’re proud to back the Mansion House Accord – a powerful example of industry and Government working together to boost UK investment, deliver better returns for savers, and support economic growth.
“Our new default pension strategy, My Future Vision, will allocate 20–25% to private markets, reinforcing Aviva’s commitment to the Accord’s pledges.
“Momentum is building, and we welcome the Office for Investment’s leadership in improving access to a pipeline of UK assets that work for pension schemes and their members.”
‘A great opportunity’ says M&G
M&G plc has also confirmed its participation in Sterling 20. As the group told us today, this initiative “builds on the Mansion House Accord, under which M&G and other participating firms, committed to allocate at least 10% of defined contribution default funds in private markets by 2030, with at least 5% in the UK, a move expected to unlock over £25 billion for housing, infrastructure and innovation in every region.”
M&G brings over 175 years of investment experience and a long-standing commitment to supporting UK growth. It told us that it currently invests £100 billion in the UK economy, spanning housing, transport, infrastructure, energy, education and technology. M&G’s £130bn With-Profits Fund is the largest of its kind in the UK and invests extensively in private markets, helping to democratise access to investments in real estate, infrastructure and private companies through its market-leading PruFund.
Andrea Rossi, CEO of M&G Plc, said: “UK pension providers have a great opportunity to drive economic growth and give savers the returns they need for retirement. The Sterling 20 Group offers a powerful platform for institutional investors to shape the country’s future from long-term investment in housing, infrastructure or strategic national projects. As a UK-listed savings and investment company investing £100 billion domestically, we are proud to be playing our part.”
Current M&G investments in the UK include:
- Financing the procurement of new trains by the UK’s West Midlands franchisee, Corelink – including36 new class 730/2 electric trains on the West Coast Main Line, adding 15,000 seats daily and increasing capacity by 20%;
- A £1 billion investment into 40 Leadenhall, the largest office development to complete in the City of London during 2024. The world-class building is designed to be green in use as well as design and sets a new standard to aspire to for corporates and developers alike;
- Zenobē, a leader in the UK transport and energy sector, supporting electrification of bus and trucks to help accelerate the UK’s energy transition;
- A long-term loan to the operator of Belfast International Airport to support investment into improving facilities, capacity and passenger experience – a key gateway to Northern Ireland and a major employer in the region;
- Envisics, an unlisted automotive UK deep tech company and global leader in Augmented Reality Head-Up Displays, increasingly sought after by the global automotive industry; and
- Pragmatic, a Durham-based semiconductor manufacturer, that enhances inventory management, checkout processes, customer interactions, and end-of life tracking.
Royal London also backing the Sterling 20 initiative
As part of the Sterling 20 initiative, Royal London has also told us that it is proud to support the Government’s ambition to drive regional growth and investment across the UK. As the UK’s largest mutual life, pensions and investment company they said: “We share the goal of helping people build their retirement savings while also building a stronger economy, connecting long-term capital with the communities that need it most”.
Hans Georgeson, Chief Executive Officer, Royal London Asset Management commented: “Recognising the UK’s growing need for high-quality healthcare and rental housing, we are targeting £1 billion of investment to each sector, supporting national priorities for inclusive growth, regional regeneration, and long-term wellbeing.
“Our investment strategy is shaped by our role as a modern mutual, focused on delivering long-term value for our members and the communities we serve. Our landmark infrastructure schemes include Atlantic Park in Bootle, where future occupiers will benefit from Freeport status, boosting trade and investment, while the launch of our Healthcare REIT enables us to meet the evolving needs of our aging population by providing care homes across the UK.
“We are actively supporting the growth of the UK’s life science and agricultural sectors, fostering innovation whilst providing food for the country and employment opportunities. These investments reflect our belief in doing the right thing for the long-term – building infrastructure that strengthens the UK’s future.”
ABI Director General Hannah Gurga said: “Our pension sector is a powerhouse for driving growth. Collaboration is key to unlock the industry’s potential to the full, and the Sterling 20 is a bold step towards achieving this ambition. Savers interests must always be at the heart of investment decisions, but with a co-ordinated approach we can work together to support a stronger economy today and savers’ futures tomorrow.”
Bringing us some legal perspective around the Sterling 20 initiative, Jason Coates, Partner at Gowling WLG said: “The Sterling 20 initiative marks a pivotal moment – it delivers action on the Government’s wish to unlock pension capital to support growth in the UK.. This is a bold recalibration of fiduciary duty aimed at aligning long-term investment returns with tangible social impact for the country. Pension trustees, insurers and fund managers are navigating a complex landscape of political, investor, beneficiary/policyholder and societal interests. This initiative creates some meaningful scale and weight of intent which can lead the way for pension capital to deliver returns aligned to stronger communities, better infrastructure, and long-term, sustainable growth.”
Andy Briggs, CEO, Phoenix Group, said: “Through the Sterling 20 we are helping to unlock billions in long-term investment that will support communities, build critical regional infrastructure, and fuel innovation across the UK. This is about putting our customers’ savings to work in ways that grow their pensions and grow the economy. This landmark initiative brings together the scale and strength of the UK’s pension and insurance sector to invest in Britain’s future.”
A note of caution from LCP
LCP Partner Stephen Budge, whilst welcoming some of the measures being planned by Sterling 20, balances its focus on the UK with the need for global growth saying: “It’s great to see further commitments being made to invest in the UK. However, we need to be careful that UK pensions don’t just aim to fix UK Plc problems; the focus must be on driving opportunities for global growth. These commitments, coordinated by the Government, are increasingly focusing on property and infrastructure, which are very UK-centric needs and opportunities. After all, we do love our homes, and this does little to increase the UK’s development of global businesses of the future.
“The Government agreed to a number of ‘critical enablers’ as part of supporting the Mansion House Accord 2030 targets, which included ‘a pipeline of UK investment opportunities’. Let’s hope we see support for growth in a wider range of asset class opportunities.”