Mansion House Accord fails to lift small-cap investments one year on
A year after the launch of the Mansion House Accord, its impact on small-cap companies remains limited. The initiative aimed to channel more pension fund investments into private markets, particularly UK assets. Yet, firms listed on Aim and Aquis have seen little change in capital inflows so far. The Mansion House Accord set a target for defined contribution pension schemes to allocate at least 10% of their funds to private markets by 2030. Half of this investment was meant to support UK-based assets. However, recent data shows that small-cap companies on Aim and Aquis have not benefited significantly from the agreement.
James Ashton, CEO of the Quoted Companies Alliance, has called on pension funds to increase their investments in these smaller firms. His comments come as pension funds’ average allocation to UK equities has dropped sharply—from over 50% in 1990 to just 4.4% today. The Pension Schemes Act provides key tools for the Accord’s success, including the Value for Money framework. Meanwhile, the Association of British Insurers (ABI) and Pensions UK have confirmed that progress is being monitored. An update on the Accord’s development is expected later this year.
Despite the Accord’s ambitions, small-cap companies have yet to see a meaningful rise in pension fund investments. The upcoming progress report will clarify whether the initiative is gaining traction. For now, the shift in UK equity allocations remains a long-term challenge for the sector.
