Smart Pension Pours £330 Million into Octopus Renewable Energy Funds

Image Credit: Octopus Energy

Smart Pension has announced a bold new move to support Britain’s green energy ambitions, committing an initial £330 million towards renewable infrastructure through funds managed by Octopus Energy Generation.

As one of the UK’s largest workplace pension providers, overseeing more than £7 billion in assets, Smart Pension has pledged to allocate 5 per cent of its default fund to two key vehicles: the Octopus Renewables Infrastructure Fund (Sky Fund) and the Octopus Energy Transition Fund (OETF). Both funds are designed to accelerate the decarbonisation of key sectors in the UK economy.

The Energy Transition Fund, launched in May 2023, made headlines with its investment in the Cornwall-based Kensa Group, a heat pump manufacturer focused on scaling sustainable heating solutions nationwide. The fund’s broader strategy extends beyond heating and encompasses other carbon-intensive sectors, including energy storage and transportation, with a focus on long-term systemic change.

Meanwhile, the Sky Fund already manages a diverse £1.5 billion portfolio of renewable energy assets. These include wind farms, solar installations, and biomass facilities. Roughly one-third of the fund’s capital is channelled directly into UK clean energy infrastructure, helping to scale the next generation of low-carbon projects.

This latest move reflects Smart Pension’s broader investment strategy, which includes a 15% allocation to private markets within its default pension fund. The company views alternative assets, particularly those with a sustainability focus, as a means to unlock long-term value while contributing to the low-carbon transition.

In a statement, Smart Pension noted that climate-aligned investments are not only a moral imperative but also a financially sound choice. With energy transition technologies maturing and policy momentum building, the firm believes now is the right time to direct institutional capital toward the UK’s renewable future.