Across the UK, there is now a clear and welcome recognition that pension schemes and private capital firms should be working more closely together. That view is shared by Government, the pensions industry, and by private capital investors themselves. It reflects a simple but powerful proposition: that better access to private capital funds can help pension savers benefit from diversified long-term returns to improve their retirement prospects, while also supporting the growth of innovative and ambitious businesses that benefit wider society across the country.
The two reports published on 9 September 2026 sit within that broader national challenge. This report considers the evolving relationship between defined contribution schemes and private capital. The other, parallel report we are publishing today looks at the Local Government Pension Scheme and the implications of recent reforms for investment in private capital funds, particularly those focused on generating strong returns by spurring nationwide economic growth. Both reports have been produced with the assistance and input of Expert Panels that UK Private Capital convenes regularly to bring together senior leaders from across the UK’s pensions and private capital industries. I am very grateful to Rob Barr for chairing the panel that produced this report, and Ben Wilkinson for chairing the DC panel, for their vision and dedication in chairing ongoing meetings of each group. Together, these Expert Panels focus on the practical issues that now need to be addressed if the intention is to translate into sustained investment in the future of the UK.
The LGPS Expert Panel’s work in this area is deliberately practical. We bring together LGPS pools, partner funds, advisers, private capital firms, policymakers and other stakeholders to identify the barriers that still stand in the way of progress and to develop workable recommendations for industry and policymakers. Some of those barriers are technical, but that does not make them minor.
Questions of structure, scale, governance and investment capability are central to whether capital can move responsibly and at pace. They require detailed consideration and sustained cooperation, across the LGPS and the private capital industry.
At the same time, it is important to be clear that this technical work is essential but not sufficient on its own. Seizing the opportunity that the UK’s world-leading private capital industry offers, both to LGPS members and the country’s most promising businesses, will also depend on wider conditions. The UK must maintain its strong pipeline of science and technology businesses, and ensure that insight and intellectual property can be translated successfully from the laboratory into commercial companies capable of scaling. The market must continue to develop models that work for long-term pension investors as well as for private capital firms, including more accessible vehicles, appropriate fee and return structures, and the skills needed to allocate confidently to the asset class.
The economic prize is significant. The UK has exceptional strengths in venture capital, growth equity, private equity and private credit. It also has world-class universities, research capability, entrepreneurial talent and a sophisticated pensions sector. If we can bring those strengths together more effectively, more domestic capital can support the businesses that will shape the next generation of economic growth, from deep technology and life sciences to financial services, clean growth and the scaling of successful SMEs. That would mean more high-potential UK companies able to secure the patient capital they need to grow here, rather than being driven to look overseas at critical stages of their development. It would mean more of the value created by UK innovation being captured in the UK economy, through jobs, supply chains, tax revenues, regional investment and stronger productivity. It would also cement and expand the LGPS opportunity set, with the potential for diversified long-term returns linked to the growth of the real economy. In short, this is not simply an investment allocation question; it is about whether the UK can connect its domestic investor base more effectively to its growth ambitions.
Progress will not be automatic. It will require trust, patience and a willingness to resolve detailed issues rather than simply restate shared ambition. But the alignment is stronger than it has been for many years, and the opportunity is too important to miss. This LGPS Expert Panel report, and the parallel DC report, should be read as contributions to that work: focused on the next set of practical steps, but rooted in a bigger ambition to ensure that UK pension capital can play a fuller role in supporting UK businesses, society and long-term returns for savers.
Michael Moore,
Chief Executive, UK Private Capital
This report examines the evolving relationship between UK DC pensions and private capital at a pivotal moment for both sectors. It reviews recent market and policy developments, progress and remaining barriers to private market investment, and draws on the work of UK Private Capital’s DC Pensions & Private Capital Expert Panel to set out practical recommendations for turning shared ambition into sustained investment.
This report explores the evolving relationship between the LGPS and private capital amid significant reform and growing ambition for UK investment. Developed through engagement with the UK Private Capital LGPS Expert Panel, LGPS pools, administering authorities, private capital managers and other stakeholders, it examines how recent policy and pooling reforms are shaping investment strategies, governance arrangements and approaches to local and regional growth.
This guide is designed to help private capital firms navigate the UK pensions landscape and understand how DC pension schemes make investment decisions. It provides a practical overview of DC scheme governance, regulation and the opportunities and challenges of investing in private markets.
“The UK is a world leader in intellectual property and company creation across technology, including deeptech, AI and quantum, life sciences and financial services. We also have one of the most advanced and innovative pension landscapes in the world.
“It is a missed opportunity that we have not made more progress to bring these two competitive advantages together in the interests of UK pension savers, UK business, and ultimately, to enable much needed growth. The opportunity to do so remains both necessary and compelling and speed is of the essence as generational shifts in technology reshape global economies and labour markets.”
“It is clear that, across the pensions and private capital worlds, there is a shared ambition that the emphasis on regional investment by the LGPS can and should be retained.
“But our panel raised concerns that, without care and some degree of flexibility over how this is achieved, some valuable cross-UK opportunities may be missed. We hope this report brings to the fore areas that require more work and consideration.”
