Affordable housing and rural broadband provision will be the first beneficiaries of a new regional investment drive by 20 of Britain’s biggest pension providers and insurers.
Legal & General has made a £2 billion commitment to invest in delivering 10,000 affordable homes by 2030, while Nest is to invest £40 million in fibre broadband in Scotland and northern England, and provide £100 million to Schroders Capital to make UK investments.
The companies are part of a new partnership called Sterling 20 that will be established at a first regional investment summit with Rachel Reeves in Birmingham this week.
The Treasury said the initiative was designed to “channel the nation’s savings into key infrastructure and fast-growing businesses in key modern industrial strategy sectors like AI and fintech”.
The 20 participants also include M&G, Phoenix, Aviva, Royal London and the Universities Superannuation Scheme.
The government is trying to encourage British pension funds to invest more in the UK and especially in growth industries and private businesses. “Even a small shift towards investing in UK infrastructure would unlock billions,” the Treasury said.
In May, the government co-ordinated the Mansion House accord in which 17 pension providers committed to invest at least 5 per cent of their main default funds in UK private markets. These 17 providers have all joined Sterling 20, alongside Rothesay and PIC, the annuity providers, and the Pension Protection Fund.
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In the summer the government revamped the Office for Investment — a joint unit of the Treasury, business department and No 10 — to help encourage investment in Britain.
The Treasury said that the office’s “unique position as a bridge between government, investors and local leaders will allow it to match transformational investment opportunities with capital”.
António Simões, chief executive of Legal & General, said: “Our £2 billion commitment, targeted at housing, infrastructure, and urban regeneration, will help unlock the investment needed in productive assets across the country — creating jobs, strengthening communities, and driving both regional and national growth.”
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Ian Cornelius, chief executive of Nest, said the UK had “exceptional investment opportunities” and was “a cornerstone of our strategy”. He added: “We have already committed around £4 billion to UK private markets, and by 2030 we expect this to rise to around £12 billion. A strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy.”
As part of the summit, the US infrastructure company Welltower will announce plans to more than triple investment in the UK to $12 billion over the next five to ten years.
An S&P 500 listed long-term investor specialising in the healthcare infrastructure sector, Welltower has already invested $4 billion in the UK over the last decade. It operates 299 social care properties across the UK, from Dorset to Scotland and supports a supply chain employing almost 28,000 people.
The company’s existing plans will add more than 2,500 extra beds to social care capacity, with 90 per cent of these outside of London.
It comes amid a severe supply and demand imbalance for social care in Britain, which ministers are seeking to address.