Legal & General has launched a £1 billion fund which could see £400 million invested in British businesses before the end of 2025.
The fund will offer its 5.2 million defined contribution members access to ‘the long-term growth potential of private markets’ and greater diversification through exposure to investments that are not typically accessible through public markets.
It has allocated 40% of the L&G Private Markets Access Fund to UK firms.
L&G, a founder signatory of the Mansion House Compact – an initiative launched in July 2023 to enable greater DC access to unlisted UK companies – has been working to bring the fund to market since 2022.
It says the fund has already received considerable interest from clients, including the London Stock Exchange Group, EDF Energy and L&G’s own DC pension scheme.
“Today’s launch is an important step forward in putting UK pension capital to work to drive economic growth while supporting people to build the savings they need for retirement,” said António Simões, group CEO.
“Building on our refreshed strategy set out in June, this Fund will offer defined contribution scheme savers access to high growth investment opportunities, provide innovative funding for communities, society and the real economy, and power L&G’s Private Markets growth ambitions.”
Rita Butler-Jones, head of DC, Legal & General, added: “Our members are at the core of what we do, and we believe providing millions of savers with exposure to the potential returns available through global private markets will support the delivery of better long-term retirement outcomes.
“When developing the fund we have spent a lot of time talking to clients about what is important to them, ensuring that the assets align to our members’ long-term investment horizons, while delivering value for money.
“L&G is the largest pension provider in the UK with over 5.2 million DC members and we believe the launch of this fund will be a game changer for DC pension savers. The fund is a one-stop shop for private market exposure and we hope it will inspire DC members into greater engagement with their pension, by investing in tangible assets which can benefit the real economy.”