"We want to be the world's next Silicon Valley and a science superpower, embracing new technologies like AI in a way that brings together the skills of our financiers, entrepreneurs and scientists to make our country a force for good in the world," he said.
To achieve that, he said U.K. institutional investors, which have £2.5 trillion ($3.2 trillion) in combined assets, should increase investments in U.K. high-growth companies, which will also help boost returns for plan participants.
U.K. investors now invest less than 1% in private equity, compared with Australia, where superfunds invest between 5% and 6%.
Mr. Hunt said this will change with the Mansion House Compact, which was signed Monday, by the government and the largest U.K. DC plans. DC plans pledged to invest at least 5% of their default funds in unlisted equities by 2030.
The move is aimed at unlocking £50 billion of investment into high-growth private companies and will be facilitated by the government through new investment vehicles. For example, Mr. Hunt said: "We will explore the case for government to play a greater role in establishing investment vehicles, building on the skills and expertise of the British Business Bank's commercial arm, which has helped to mobilize £15 billion of capital into over 20,000 companies."
Mr. Hunt also said the government will set out to create a permanent regulation for superfunds to help defined benefit plan sponsoring employers and trustees manage liabilities. The government on Tuesday will launch a consultation on expanding the role of the £39 billion Pension Protection Fund, London, which currently is the lifeboat fund for pension funds of insolvent U.K. employers.
Mr. Hunt also said the government is intending that local authority pension funds by March 2025 transfer all of their assets into the pools.
The government wants the pools to exceed £50 billion in assets and invest at least 10% of their assets in private equity by 2030, Mr. Hunt said.
Mr. Hunt said the government will also assess the "culture of investment decisions" and improve the understanding of pension trustees' fiduciary duty across both DB and DC plans.
He has also unveiled changes to financial services in draft legislation on prospectus reforms, which will give companies more flexibility to raise larger sums of money from investors more quickly.
During the speech Mr. Hunt also said the requirement to unbundle research costs will be abolished by the first half of next year. Under European Union regulation MiFID II, brokers had to require managers to pay for research rather than provide it as part of execution services.
Before the end of 2024, Mr. Hunt said the government will establish a pioneering new "intermittent trading venue" that will improve private companies' access to capital before they list publicly, he said.
