M&G has announced plans to invest more than £1bn into the UK economy over the next three to five years, targeting affordable housing, regeneration, infrastructure, and innovative companies through the launch of two new funds.

The commitment will be delivered by channelling capital from M&G’s Life business alongside investment from the British Business Bank and Local Government Pension Scheme (LGPS), Scottish Borders Council Pension Fund.

The international savings and investment business already has more than £100bn invested in the UK and said it aimed to attract additional capital from LGPS funds and international investors into its forthcoming M&G UK Social Investment Fund, alongside other long-term investors such as defined contribution (DC) pension schemes, endowments, and charitable foundations.

The fund is set to launch with a £130m commitment from Scottish Borders Council Pension Fund and M&G’s With Profits Fund.

Aligned with the government’s ambition to encourage LGPS assets to support UK economic growth, the fund will focus on delivering positive social outcomes through urban regeneration, affordable housing, clean energy, and infrastructure.

It will be managed by M&G’s private markets business and is intended to enable large-scale investment into bespoke projects that demonstrate real-world impact for pension savers.

Early opportunities include partnerships with local authorities and registered providers to deliver purpose-built accommodation for young care leavers, alongside additional affordable housing projects.

M&G also confirmed that its M&G Catalyst Growth Equity Fund had secured commitments exceeding $850m.

This included capital from M&G’s With Profits Fund and a $100m commitment from the British Business Bank, alongside other institutional investors.

The Catalyst Fund invests in innovative private companies in the UK and internationally that aim to deliver both financial returns and measurable social and environmental impact.

M&G said these businesses were often university spinouts that, with access to scale-up capital, could become leaders in areas such as technology, healthcare, and sustainability.

Chancellor of the Exchequer, Rachel Reeves, said the investment was “exactly what our pensions and investment reforms are designed to unlock”, adding that it would direct billions of pounds into homes, infrastructure and innovative businesses to support the UK’s next phase of growth.

Echoing this, M&G plc chief executive, Andrea Rossi, said the firm was seeking to unlock capital from British savers and international partners to support long-term economic productivity.

“M&G is poised to build critical infrastructure, support the growth of British businesses, while laying the foundations for a more productive, sustainable economy and stronger communities across the country,” he noted.

Also commenting, Scottish Borders Council Pension Fund committee chair, David Parker, said the authority was “delighted” to partner with M&G on the new UK Social Investment Fund, arguing that the pipeline of projects would make “an enormous difference to many communities” across the UK.

British Business Bank chief executive, Louis Taylor, added that the organisation was pleased to support the initiative, which he said would help drive investment into the UK’s growth economy and encourage domestic institutions to increase allocations to unlisted companies.

---