- UK home to £3.9 trillion pool of investment capital yet scale-up companies and infrastructure projects remain chronically underfunded
- The Mansion House Accord and the new Investment hub could mobilise £35bn, covering one-fifth of the UK’s investment need.
The City of London Corporation has published fresh analysis that shows a £150 billion shortfall in capital required to power the UK’s scale-up economy and critical infrastructure by 2030. Despite being home to £3.9 trillion pool of investment capital, the UK continues to underfund sectors that drive innovation, productivity, and long-term prosperity.
The report highlights two key interventions by the City of London Corporation already in motion:
- The development of a new investment hub, a government-backed initiative will aim to attract £10bn in international capital by 2030, including £7.7bn from sovereign wealth funds.
- The Mansion House Accord, which aims to unlock £25bn in domestic investment in areas such as infrastructure by encouraging pension funds to allocate 10% of assets to private markets.
Together, these initiatives could mobilise £35bn, covering one-fifth of the UK’s investment need. The remaining £115bn gap underscores the urgency of aligning private capital with public priorities.
Scale-up businesses, which contribute £1.4 trillion to the UK economy and employ over 3.2 million people, require £15bn annually to meet their growth potential. Yet 70% report difficulty accessing the capital they need. Meanwhile, infrastructure investment must rise by £5bn year on year to meet the government’s £80bn annual target by 2030.
The report also highlights the underutilisation of long-term savings. UK defined contribution pension funds hold £298bn in assets but allocate just 8% to domestic equities and a mere 2% to growth assets e.g scale-ups, far below international benchmarks. Canadian pensions allocate 34% to growth assets; Australian superannuation funds allocate 23% to domestic equities.
To close the gap, the City Corporation calls for:
- A credible pipeline of investible projects to attract institutional capital. These should include upgrades to critical UK digital, energy and transport infrastructure.
- Regulatory reform to enable annuity providers to invest more in infrastructure.
- A renewed focus on co-investment opportunities in growth sectors.
Chris Hayward, Policy Chairman of the City of London Corporation, said:
“The UK has the capital, talent and institutions to lead, and government has already taken important steps through initiatives like the Mansion House Accord and the Office for Investment: financial services. But without a clear strategy to channel investment into growth businesses and infrastructure, we risk failing to close the £115 billion investment gap by 2030. This analysis is a call to action: government, industry and investors must work together to close this gap, because the cost of inaction is measured not just in missed opportunities, but in lower productivity and slower growth.”
Notes to editors
ABOUT THE CITY OF LONDON CORPORATION:
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally successful UK. www.cityoflondon.gov.uk
1 Methodology: Data is sourced from third-party data providers these are outlined on page 7 of the analysis document. We have identified £3.9tn of capital invested in the UK in 2024. The sources of UK investment are asset managers, pensions, annuity providers, private assets, FDI, business investment and government backed investment. In the case of asset managers, pensions, annuity providers and private equity/venture capital; this is the amount they invest in the UK, not total assets under management. We have also identified the asset classes those investors are allocating capital to in the UK.
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