Smart Pension invests £330m into Octopus Energy fund as Mansion House Accord bears fruit
Smart Pension has made a £330m investment into two funds managed by Octopus Energy in an early sign the Chancellor’s Mansion House Accord is beginning to bear fruit.
The pensions firm, which has more than £7bn in assets under management, said the commitment will represent 5 per cent of the portfolio of its default fund, forming a major component of its target of allocating at least 15 per cent to private markets.
The Mansion House Accord, an agreement between some of the UK’s biggest pension funds in May, involved a pledge to invest at least 10 per cent of pension funds into private markets, of which at least half relate to the UK.
Chancellor Rachel Reeves said: “Our reforms are about unlocking investment to deliver higher returns for savers, drive growth, and create good jobs. This means more money in the pockets of working people, our Plan for Change in action.
Octopus Energy’s renewables boss said the £330m cash injection from Smart Pension will help accelerate the UK’s route to Net Zero.
Zoisa North-Bond – chief executive of Octopus Energy Generation – claimed that the deal “creates real, tangible change for communities and speeds up the UK’s journey to net zero”.
Smart Pension sees Octopus Energy Generation – which part-owns heat pump technology maker Kensa – as a route to secure “strong, sustainable returns” for its customers.
The deal is set to produce an investor-funded source heat pump network in South Wales – the first of its kind in the UK.
Currently, the pensions fintech has around 1.5m users across 70,000 employers, and projects that its assets under management will hit £10bn by the end of next year.
Impact and returns
Smart Pension’s director of investment proposition James Lawrence said the deal will “deliver measurable environmental and social impact for years to come”.
“From renewable surplus power generation to support local leisure facilities, to cutting-edge clean tech like heat pumps, these are the kinds of investments that not only align with our own ethical standards, but also help members feel a deeper connection to their pension savings.”
North-Bond added that the deal “brings everything full circle”, with “the very money people are saving for retirement is helping to build the smarter, carbon-free energy system they’ll rely on in years to come”.
Meanwhile, Kensa chief Tamsin Lishman said the investments will “support the UK’s net zero goals, generate growth, and provide more well-paid green sector jobs”.