Seventeen pension providers have pledged to put 10% of DC assets into private markets by 2030. That is roughly GBP 50 billion looking for a home. Here is how to position your fund.
The Mansion House Accord, launched on 13 May 2025, is the UK government's most ambitious attempt to redirect pension capital into private markets [1]. Seventeen major pension providers have voluntarily committed to allocating 10% of their defined contribution workplace pension portfolios to private assets by 2030, with at least 5% ringfenced for UK investments [1][2]. The numbers are large: approximately GBP 50 billion in investable assets expected to flow into private markets over the next few years, with roughly GBP 25 billion targeted specifically at UK-based opportunities.
For emerging fund managers, this is not abstract policy. It is the largest single expansion of the available LP base in UK private capital in a generation. And smaller managers stand to benefit more than you might expect, because the volume of capital being pushed into private markets exceeds what established large-scale managers can deploy at attractive terms.
What the Accord actually commits to
The Mansion House Accord is a voluntary pledge, not legislation. The 17 signatories include many of the UK's largest DC pension providers. Their commitment is to allocate 10% of default fund assets to private markets (private equity, venture capital, infrastructure, property, and private credit) by 2030 [1].
The 5% UK investment target within that 10% is the piece that matters most for domestic fund managers. It creates explicit demand for UK-domiciled or UK-focused private capital funds. If you are running a UK venture or PE fund investing primarily in UK companies, you are exactly the type of manager this policy is designed to support.
The Accord sits alongside a broader government push to consolidate smaller DC pension schemes into larger pools, on the basis that larger schemes are better positioned to make private market allocations [2]. Consolidation creates bigger cheque-writing entities, which should make it easier for fund managers to raise meaningful capital from a smaller number of pension relationships.
How pension schemes invest in private markets
If you want to access this capital, you need to know how pension scheme investment actually works.
UK pension schemes, both DC workplace schemes and Local Government Pension Scheme (LGPS) pools, are classified as professional investors under the FCA's framework [1]. This means they can invest in alternative investment funds restricted to professional investors without the additional disclosure and investor protection requirements that apply to retail marketing. For fund managers, this cuts the documentation and compliance burden compared to raising from retail investors.
DC schemes typically invest through their default fund, which is the investment option members are placed into if they do not make an active choice. The vast majority of DC members are in the default fund. When the Accord commitments talk about 10% allocation, they are primarily talking about the default fund allocation, which is where the real volume sits.
The investment decision for a DC scheme's default fund is made by the scheme trustees (or, for contract-based schemes, the provider's investment committee). These are professional allocators with governance frameworks, investment beliefs, and due diligence processes. They are not writing cheques on impulse. Expect a structured process with clear criteria.
What pension allocators look for
I have spent time with DC scheme allocators and their advisers, and there are consistent themes in what they want from private market managers.
Track record and team stability. This is the hardest hurdle for a first-time manager. Pension trustees are fiduciaries, and they need to justify their allocation decisions. A team with relevant prior experience, even if not as named GP of their own fund, matters a great deal. Track record from previous employers, co-investment history, and sector expertise all count.
Governance and operational standards. Pension schemes expect institutional-grade operations: proper valuation procedures, audited financials, clear reporting, conflict of interest management, and regulatory compliance. This is not negotiable. If your fund operations look like a spreadsheet and a shared inbox, pension capital is not accessible to you yet.
Alignment with ESG and UK investment objectives. Pension schemes face their own regulatory pressure around sustainability reporting and responsible investment [3]. Many will preferentially allocate to managers with clear ESG frameworks, UK-focused investment strategies, or thematic alignment with government priorities like clean energy, life sciences, or digital infrastructure.
Fund structure. This is where the Long-Term Asset Fund (LTAF) becomes relevant. DC pension schemes are most comfortable with authorised fund structures that include FCA oversight, regular valuations, and some form of redemption mechanism. LTAFs were specifically designed for this purpose. If you are targeting pension capital, seriously evaluate whether an LTAF structure serves you better than a traditional limited partnership.
The timeline reality
Pension fund investment processes are slow. Scheme trustees and investment committees often meet quarterly. Due diligence is thorough. Approval chains are long. From initial conversation to final commitment, expect 6 to 12 months -- sometimes longer for a first-time manager relationship [1].
This means you need to start building pension relationships well before you want to close your fund. If you are planning a first close in Q3 2027, you should be having initial conversations with pension allocators now. The Accord commitments run to 2030, so there is time, but early movers will have an advantage as pension schemes begin making their first allocations and establishing their preferred manager relationships.
LGPS pools: a parallel opportunity
The Local Government Pension Scheme pools represent a distinct opportunity alongside DC workplace schemes. LGPS assets are being consolidated into regional pools that have dedicated private market allocation teams. These pools have historically been more active in alternatives than DC schemes, and some have explicit mandates to support UK economic growth through private market investment.
LGPS pools are also professional investors and can invest in AIFs on the same basis as DC schemes [1]. The governance and due diligence processes are similar. For managers with UK-focused strategies, LGPS pools are worth targeting alongside the Mansion House Accord signatories.
Practical positioning for emerging managers
Based on what I have seen work, here is how I would approach pension capital if I were launching a UK fund today:
- Get your operations to institutional standard first. This means proper fund administration, audited financials, documented valuation procedures, and a compliance framework that can withstand due diligence. Pension allocators will walk away from managers who cannot demonstrate operational rigour.
- Consider LTAF structure early. If pension capital is a core part of your fundraising plan, structuring as an LTAF removes a barrier that limited partnerships create. The operational cost is higher, but the capital access justifies it if pensions are a meaningful part of your target LP base.
- Build your narrative around UK impact. Pension schemes allocating under the Mansion House Accord are specifically targeting UK investments. Frame your fund in terms of its contribution to UK companies, employment, and innovation. This is not greenwashing -- it is responding to what your investors are mandated to prioritise.
- Invest in relationships before you need the capital. Attend industry events where pension allocators are present. The BVCA, CFA UK [2], and various pension conferences provide access. Build familiarity before you are formally fundraising.
- Be patient with timelines. A 12-month fundraising process for pension capital is normal, not a sign of failure. Build this into your fund timeline from the start.
The scale of the opportunity
To put the numbers in perspective: GBP 50 billion flowing into private markets by 2030, with GBP 25 billion earmarked for UK investments [1]. The established large-cap PE and infrastructure managers will absorb some of this, but their existing funds are already well-capitalised. The overflow -- and it will be significant -- needs to find homes with mid-market and emerging managers who can deploy capital into smaller UK companies and earlier-stage opportunities.
For first- and second-time fund managers with a real UK investment thesis, the Mansion House Accord is the most favourable fundraising environment in years. The pension capital is coming. The question is whether your fund is structured, operated, and positioned to receive it.
How Infra One helps managers access pension capital
We work with emerging managers to build the operational infrastructure that pension allocators require. Our fund administration platform provides the institutional-grade operations, reporting, and compliance that pension due diligence demands. We handle NAV calculations, investor reporting, capital call execution, and regulatory filings to the standard pension trustees expect.
For managers considering LTAF structures to access pension capital, we provide the specific operational capabilities LTAFs require: regular valuations of illiquid portfolios, redemption management, and FCA compliance for authorised funds. If pension capital is part of your fundraising strategy, talk to us about getting your operations ready.
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