Cushon signs Mansion House Compact
Pension and savings fintech Cushon is the newest signatory to the Mansion House Compact announced by the Chancellor of the Exchequer in the summer to increase the proportion of UK pension assets, including Defined Contribution (DC) default funds, invested in unlisted equities.
Cushon’s existing 15% default fund target allocation to private markets, includes unlisted equities, infrastructure, real estate and natural capital. Of this 15%, Cushon targets between 25% and 45% invested in unlisted equities, meaning its current total default fund target allocation to unlisted equities is between 3.75% and 6.75%.
The Mansion House Compact is a voluntary expression of intent by DC pension funds to take action to secure better financial outcomes by facilitating access to the higher potential net returns that can arise from investment in unlisted equities as part of a diversified portfolio, acting consistently with the best interests of UK long-term savers.
The Cushon Sustainable Investment Strategy, which took effect in Summer 2022, saw the fintech allocate one of the largest proportions of its default fund to illiquid assets in the UK DC Master Trust sector. It is a cornerstone in its mission to rapidly reduce the scope 1 and 2 CO2e emissions funded by the growth stage of the strategy.
The strategy has already achieved a 64% reduction in scope 1 and 2 emissions compared to Cushon’s independently verified industry benchmark of 118tCO2e/$m invested. In October it announced its target to reach an 80% reduction by September 2030 – with a target footprint of 24tCO2e/$m invested.
Chancellor of the Exchequer, Jeremy Hunt said:"I am delighted that Cushon has become the 11th signatory of the Mansion House Compact. This adds yet more momentum to the government and industry’s collective mission to bolster retirement incomes for pension savers and turbocharge the growth of our most innovative companies."
Ben Pollard, Founder and CEO, Cushon said:“Private market assets not only present opportunities for higher returns, they also build pensions to be proud of. Investing directly in real-world assets in the UK aligned to the values of our members means we can better engage members with their savings. When members can see, touch, and even taste, the good that their money is doing, they are more likely to pay attention to their pension which encourages increased contributions and better planning for later life. We’re pleased to be signing the Mansion House Compact and encouraging the wider industry to include these valuable assets in their strategies.” Christopher Hayward, Policy Chairman, City of London Corporation said:
“The United Kingdom has the largest pension market in Europe with £3 trillion of assets under management, but how this money is invested is limiting returns for savers. In Australia, comparable schemes invest ten times more in private markets than UK schemes. If the UK’s DC pensions industry were to allocate 5% of assets to unlisted equities, it could unlock £50 billion of investment in high growth British companies by 2030.”
Examples of Cushon’s private equity investments include Adler, a provider of solar power systems and e-charging infrastructure and Igloo, an insurtech business enabling climate related micro-insurance at scale.