UK workplace pension provider Smart Pension has co-founded an initiative to explore how tokenisation can accelerate the flow pension investments into renewable energy assets.
The master trust – which manages £7.5 billion on behalf of 1.5 million beneficiaries – signed a memorandum of understanding to create the Tokenised Renewable Assets Coalition (TRAC), alongside tokenisation infrastructure provider Ctrl Alt, pension investment platform Mobius, and renewables investor Octopus Energy Generation.
TRAC intends to integrate blockchain-based tokenisation infrastructure with existing pension investment frameworks to reduce operational complexity, enhance liquidity and lower access costs.
Tokenisation involves digitising securities and other financial assets, creating secure, easily tradeable tokens on a blockchain for faster, more efficient transfer. By enabling fractional ownership, tokenisation can substantially wider access to assets, including pension savers.
The aim of the scheme is to develop “practical and compliant” models that can be adopted by pension providers and wealth platforms to overcome barriers to allocations to renewables, and to improve beneficiary choice and outcomes.
TRAC’s founders said the collaboration aligns closely with the recent Mansion House Accord and the UK’s Pension Schemes Bill, which encourages pension providers to invest 10% of their default funds to private market assets.
Building on these, the UK government’s Financial Services Growth and Competitiveness Strategy (FSGCS) is expected to unlock up to £50 billion in domestic investment through increased pension fund allocations to private markets.
Smart Pension is one of 17 signatories to the accord that collectively represent 90% of UK active defined contribution savers and has committed to allocating 15% of its default fund to private markets and investments such as renewable energy and infrastructure projects by 2030.
“This coalition is an important first step in demonstrating how tokenisation can unlock access to previously hard-to-reach asset classes. We aim to show how blockchain-based solutions can help pensions access new investment opportunities, enhance diversification and support government growth strategies,” said Matt Ong, Founder and CEO of Ctrl Alt.
