UK's biggest pension fund pushes deeper into VC with $1.3B target
UK's biggest pension fund pushes deeper into VC with $1.3B target.
Workplace pensions provider Nest is planning to allocate up to £1 billion (about $1.3 billion) to VC by 2030 as UK efforts to funnel pension assets into private markets ramp up.
The £68 billion fund, which is the UK's largest by membership with more than 14 million members, will initially commit £200 million to Schroders Capital to support existing investments and provide fresh funding for late-stage companies.
Included in Nest's new VC portfolio are AI video startup Synthesia and autonomous driving startup Wayve , which is set to conduct an $85 million employee share sale on the London Stock Exchange's private markets platform, Pisces, on Wednesday.
The UK's venture market is set for significant growth this year, with £14.4 billion invested so far, according to PitchBook data. At the current pace, deal value for 2026 is projected to increase by more than 50% from last year, but UK pension funds have historically been on the sidelines.
"The UK is already Europe's largest venture hub, and the world's third largest," Tim Creed, head of private equity investments at Schroders Capital, said. "It is one of the most efficient venture ecosystems globally, growing unicorns at pace. However, domestic capital has not historically participated at the same rate. The UK has a significant and largely untapped opportunity to bring this growth to pension portfolios."
Nest is planning to increase its allocation to private markets to 30% of AUM by 2030 from 19%, in line with a broader push across the pensions industry to increase exposure to private markets.
Bringing more pension assets into private markets has been a key focus for successive governments, starting in 2023 with the Mansion House Compact under the Conservative government. At the time, nine of the UK's largest defined-contribution pension schemes agreed to invest up to 5% of their default funds in unlisted equities by 2030.
Last year, under the Labour government, 17 workplace pension providers signed a new agreement committing at least 10% of their assets, which the UK Treasury estimated would unlock £50 billion for private market investments.
According to the Association of British Insurers, signatories of the Mansion House Compact increased their default funds' investment in unlisted equities from £800 million in 2024 to £1.6 billion last year.
In the latest UK policy move, the Pension Schemes Act 2026 was passed in April to consolidate smaller providers and boost investment returns. The law includes a provision giving the government the power to require DC providers to hit Mansion House Accord targets, though it can't be used before 2028 and comes with several safeguards.
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