UK defined contribution (DC) pension default funds aligned with the Mansion House Compact have only made two legally binding commitments to venture capital (VC) funds so far, according to research from UK Private Capital.

UK Private Capital surveyed 83 venture capital and growth equity firms in April and May 2026 to assess their experience engaging with UK DC pension funds.

The trade association also found that only six firms were currently in active negotiations with Mansion House signatories over new commitments, while many VC firms remained pessimistic about the long-term impact of the reforms.

While the research suggested there had been some engagement between pension funds and private capital firms, it found that progress towards securing commitments remained slow.

Over three quarters (76 per cent) of respondents felt they had not been able to engage meaningfully with DC pension providers, while 73 per cent believed the government needed to do more to facilitate investment into private capital.

Consequently, the findings suggested that perceptions of the Mansion House agenda had worsened, with 48 per cent of respondents saying they were not optimistic that the agreements would deliver greater investment by 2030, compared to 20 per cent who were optimistic.

The Mansion House Compact, launched in 2023, secured commitments from 11 of the UK’s largest workplace pension providers to invest at least 5 per cent of DC default funds in unlisted equities by 2030.

This was followed by the Mansion House Accord in 2025, under which 17 DC schemes committed to investing 10 per cent of default funds in private markets by 2030, with 5 per cent allocated to the UK.

UK Private Capital said the initiatives reflected growing consensus between government, the pensions industry and private capital that increasing investment into venture capital and growth equity could provide diversification and stronger returns for savers, while also helping to address the funding gap facing scaling UK businesses.

However, the association argued that progress had been limited.

ABI data tracking the Mansion House Compact showed that, as of February 2025, only 0.6 per cent of DC default funds were invested in unlisted equities.

Its latest Report on Investment Activity also found that British private capital received 16.5 times as much foreign investment as domestic investment in 2025.

The government has sought to build momentum through the Pension Schemes Act, which aims to consolidate pension funds to improve their ability to invest in private capital and includes powers to compel Mansion House Accord signatories to invest in the asset class under certain conditions.

However, UK Private Capital is now calling for further action from the government, including proposals for an accreditation process, known as NOVA, designed to help pension funds identify investment opportunities in private markets.

The proposal draws on France’s Tibi initiative, which has secured approximately €12-13bn in commitments from long-term investors since its launch in 2020.

Commenting, UK Private Capital chief executive, Michael Moore, said: “Only a small number of venture capital and growth equity funds have received any investment from any UK pension funds so far, despite efforts from both the pensions and private capital industry.

“Most of the firms we spoke to told us that the process was slow, unclear, and that many pension providers are simply not yet equipped to invest in the asset class.

“While government has made a welcome push for momentum with the passing of the Pensions Schemes Act, there needs to be a much greater sense of urgency if the Mansion House agreements are to be successful.”

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