Britain will not force pension funds to consolidate or invest in high-growth companies, but there must be change in the sector to give pension holders better long-term returns, finance minister Jeremy Hunt said on Wednesday.

Hunt launched the “Mansion House Compact” in July to help channel cash from direct contribution pension funds into unlisted companies to boost Britain’s economic growth.

The government wants to persuade pension schemes to invest some of their funds in infrastructure as well as startups and green technology.

Ten companies have now voluntarily committed to invest 5% of their pension funds, or about 50 billion pounds in total, in unlisted companies by 2030.

In addition, consolidation of pension funds is seen as key to giving them scale and expertise to invest in growth companies without being overly exposed to risky investments.

“I think we have got too many pension funds in this country, and I do want to see an industry where we end up with fewer, larger funds,” Hunt told an event to take stock of the initiative. He said he wanted to see larger funds with the confidence to invest in growth companies.

“I’m not thinking we should mandate how people do that. I want to give people options … but to make it clear that no change is not an option,” Hunt said.

Insurance broker Aon became the tenth member of the compact on Wednesday.

The British Private Equity & Venture Capital Association (BVCA) also announced that 20 firms will help pension funds put cash into venture, growth and other private capital funds, helping to give smaller pension funds in particular the expertise to invest, Hunt said.

Hunt said he would give an update on more initiatives to lift barriers for pension investments in his Autumn Statement on November 22, including a government-supported “vehicle” for investments now being looked at by the British Business Bank as an alternative to merging pension schemes.

Nausicaa Delfas, head of The Pensions Regulator, said she supported consolidation and moves to diversify portfolios, with new guidance for schemes due at the end of the year on investing in private markets.

Delfas said fewer, larger and well run schemes were needed, and it was time to consolidate pension funds that lack expertise, scale and appetite to deliver better returns to savers into funds that do.

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