Phoenix Group, the UK’s largest long-term savings and retirement business, is reportedly planning to launch a new multibillion-pound fund to invest in high-growth companies and boost pension returns.
The Telegraph reported that Phoenix, which owns insurer Standard Life, was in the early stages of developing a superfund to, among other things, pool cash to invest in life sciences and fintech firms, as well as injecting long-term venture capital into unlisted companies in the UK and overseas.
By contributing to the investment vehicle, thousands of smaller pension funds would also be able to gain access to venture capital and high-growth companies.
The news will come as a boost to Chancellor Jeremy Hunt, who has said that he wants to increase returns for savers while turbocharging investment in the UK.
Ministers have claimed the government’s Mansion House Reforms could provide a £1,000-a-year pension boost to the average earner as pension funds make riskier investments in start-up companies.
Rakesh Thakrar, finance chief at Phoenix, told City A.M. last month that the Mansion House Reforms could help deliver a “huge benefit” to UK pensioners.
Phoenix, which has 12m customers and more than £280bn of assets under management, is expected to launch its new fund this year.
In line with Mansion House pledges made by the biggest defined contribution (DC) pension schemes, the fund would help Phoenix reach a target of investing at least five per cent of its DC workplace pension assets in unlisted companies by 2030. Phoenix’s figure is reported to currently stand at less than one per cent.
The Treasury announced last month that defined contribution pension funds will have to publicly disclose their level of investment in the UK.
Some pension funds, however, have warned that mandating UK-based investment could lower investor returns.
City A.M. approached Phoenix for comment.
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