Twenty of the UK's largest pension providers and insurers, collectively known as Sterling 20, are launching a new investor-led partnership to support national growth initiatives, including affordable housing, rural broadband, and business finance, announced at the Regional Investment Summit in Birmingham.

This initiative aims to leverage pension funds and insurers as key drivers of economic development, with funds allocated based on local needs to support projects like infrastructure, housing, and regeneration, delivering both financial returns and societal benefits.

Nest, representing about a third of the UK workforce, will invest around £500 million with Schroders Capital, with £100 million specifically dedicated to UK projects in the coming years.

Additionally, eleven pension providers have committed to investing 5% of their funds in UK private assets, up from 0.6%, signaling a strategic move to increase private investment in the country.

This move reflects a government effort to utilize pension funds and insurers as catalysts for economic growth, with recent commitments from council pension funds totaling £400 billion to support housing and homelessness initiatives.

Industry leaders like Hannah Gurga of the ABI have praised the partnership as a bold step demonstrating the power of cooperation between industry and government to drive growth and improve outcomes for savers.

Funds will be sourced from L&G’s balance sheet and co-invested from assets managed on behalf of pension clients and master trusts, indicating confidence in the UK economy.

While the government seeks to boost private investment, some finance firms remain skeptical about the effectiveness of current initiatives and the availability of shovel-ready projects, with upcoming budget decisions potentially influencing business confidence.

Previous successful projects include a £350 million partnership with Newcastle City Council and Newcastle University, transforming a former brewery site into a research and housing hub, and a £1 billion regeneration project in Cardiff’s City Square, creating jobs and economic value.

Funds will be allocated based on local needs to support projects like affordable housing, knowledge economy hubs, infrastructure, and retrofitting homes, aiming to deliver both societal and financial benefits.

This initiative is part of a broader effort to increase investment activity within the UK's financial sector, with the Office for Investment facilitating matching opportunities to unlock billions in infrastructure.

L&G’s commitment aligns with the Mansion House Accord, leveraging over £2 billion in assets to foster long-term economic growth and societal impact through partnerships and large-scale projects.