Rachael Rowe’s Post

Australia’s largest #pension fund has earmarked £18 billion for UK-based investments by the end of the decade. With over A$300 billion (£154 billion) in retirement savings under management and 100 sets of boots already on UK soil, AustralianSuper is “very optimistic about the UK, especially in the long term” chief executive Paul Schroder told Bloomberg TV on Monday. He cited digital, mixed-use property, infrastructure and energy transition as prime targets for investment. AussieSuper’s big bet on UK investments comes at an opportunistic time, with the valuations of UK plcs having started to lag their US counterparts, with the London Stock Exchange failing to attract the same levels of capital it saw before Brexit. Cheaper UK PLC valuations have led to a buying frenzy among private equity firms and a surge in take privates. More at #Proactive #ProactiveInvestors http://ow.ly/1oez105kxeU

Gill Wadsworth details the new #UK #Labour government's establishment of a GBP7.3 billion National Wealth Fund, designed to encourage #UK institutions to back the UK. Wadsworth writes: "Among those welcoming the provision of a multi-billion-pound vehicle in which those saving for their retirement can make allocations to assets with long-term horizons, is Nigel Peaple, Director of Policy and Advocacy at the Pension and Lifetime Savings Association, who says: “In examining the role pensions might play in providing additional investment in UK growth assets, the PLSA recommended last year that the government take steps, alongside the British Business Bank, to improve the pipeline of investible assets available to pension funds.” Read more here: https://lnkd.in/dyDD7qSX

How to design a UK wealth fund is baffling both Labour and the Tories - Attracting enough capital to boost Britain’s growth rate depends on overcoming the public-private language barrier There are many uncertainties about the UK’s political future. But whoever forms the next government is likely to launch a “growth fund” to invest in the economy. Chancellor Jeremy Hunt has already tasked the British Business Bank to think through its design; Labour is proposing a “national wealth fund”. Both parties hope to attract big pools of institutional capital, particularly pension fund assets. Pension assets in the UK total £2.5tn. Given that the bulk are currently invested abroad, it is understandably tempting to find ways to attract at least some of them back into driving economic growth at home. Any new government will be simultaneously cash-strapped and face huge investment needs. In London alone, the funding requirement for providing new social housing is forecast at £5bn a year. Getting the design of any national wealth fund right is critical to attracting institutional capital at scale — the UK has much to learn from other countries, such as Australia’s Future Fund. However, neither the Conservatives nor Labour are approaching the design challenge in the most effective way. Plans under consideration at the British Business Bank envisage pension funds having access to the BBB’s own investments, offering a path for them to co-invest in high-growth companies under its guidance. Few are the venture capital investors, in the UK and elsewhere, who would be prepared to outsource due diligence in this manner. Meanwhile, nine of the UK’s largest workplace pension schemes have signed up to the chancellor’s aspiration for them to invest 5 per cent of assets in private markets to support growth. In private, though, the pensions industry questions the government’s ability to achieve this goal in a way which does not put pensioners’ savings at risk. Shadow chancellor Rachel Reeves’ suggestion that pension funds might be mandated to invest in fast-growing UK companies elicits similar anxieties. #wealthfund #entrepeneurship https://lnkd.in/e7EZpcb4

I solved this problem back in 2010 Jamie Broderick but the Tories and Lib Dems ignored me in 2014. Now a decade later 10m UK workers have £600bn less in wealth than they could, and should have had. Pension Computers that said 'No' when legislation, the FCA and HMRC said 'Yes' is why an average UK worker is £60,000 less well off. #Pensionwashing is rife, and 5 ⭐️ Awards rein down like confetti for 'low cost' pension products that delivered failure to 9 in 10 UK workers. In my private response to CP20/9 I posed whether the UK pension industry's Value for Money framework was the next LIBOR rigging scandal to be exposed. I've also commented on the Pension Platform Mafia who enduce desperate journalists to write up their pension propoganda for a 'low cost' Utopian savings society. Well the AE chickens have come home to roost, as my suggestion to the FCA that professional member bodies should force their members to come clean on the effectiveness and efficiency of their products at meeting the identified needs of their customers. I predicted that 1 in 10 members needs were not being met over 10yrs ago and that 1 in 3 workers would likely see their savings gap grow, not reduce. I was also right on that too. I decided to focus on the effectiveness and efficiency of UK Life Office's and Professional Advisory Firms own DC Workplace Pension offers to their own workers. If UKFS doesn't do the right thing for their own workers, what rights should they have to make money from 6m Enterprises and their 32m Workers? ESG my arse. Pension providers don't care about their own workers paying twice as much as the most effective solutions, so they sure as hell won't be pushing out the boat to their customers. We now have the new Consumer Duty because of the actual performance data that I hold for 3 Cohorts covering a 22 year age range and salaries that match the same requirements of 9 in 10 members facing an uncomfortable retirement. The math doesn't lie, only those who want to cover up their failures do. It's time for a fairer, cleaner and more equitable financial eco-system. #BUOM

🇬🇧 "The UK Government has clearly been hard at work over recent months devising plans to boost investment into the British economy from pension funds. For any funds looking to join this pact and invest in riskier UK assets, one of the largest hurdles they could face is executing the underlying operational shift required in allocating towards a wider set of assets. 🏦 After all, the reality is the operational processes surrounding private assets differ considerably from those associated with the ‘safer’ assets pension funds typically invest in, like public equities and sovereign bonds." - Philipp Sfeir, Head of EMEA North + ZAF, NeoXam Read the full article from TabbFORUM here ➡️ https://lnkd.in/eagBBmft #PensionFunds #DataManagement #InvestmentManagement #PortfolioManagement #PortfolioData #Data #PrivateAssets

Among the dozen proposals for a national wealth fund to invest in the UK economy, a key ingredient to success seems largely to be missing, says Sarah Gordon, visiting professor in practice at the Grantham Research Institute on Climate Change & the Environment (and former CEO at the Impact Investing Institute). Rather than "build it and they will come", she emphasises the need for collaborative design between government and the financial sector, both asset managers and asset owners (especially pensions). (Co-design, by the way, is a principle that could be more actively implemented in most interactions between government and the financial sector, including regulation and procurement.) Any suggestion of mandatory participation by pension funds in order to overcome their resistance to the proposals is simply proof that the proposals do not meet the fiduciary requirements of the pensions and should go back to the drawing board. The article includes a link to Sarah's recent publication, "Investing in our future: practical solutions for the UK government to mobilise private investment for economic, environmental and social policy priorities". #pensions #impactinvesting

Back in 1990 UK pension funds owned more than £1tn worth of UK companies; now they hold less than £100bn. How to reverse this trend may not be top of the voters’ list of issues that decide the outcome of the next election, but it is vital to providing any financially constrained incoming government with the fuel it needs kick As the author says, history shows that designing a successful vehicle using capital from investors with different risk and return goals requires collaboration from the outset. Best practice involves respecting different stakeholders’ investment aims as well as their risk and return profiles. Reconciling these different aims, when public and private sectors often seem to speak a different language, is not easy. But if we are to create a national infrastructure fit for the purpose of stimulating economic growth and driving the improvements in productivity that will break the doom and gloom loop, we need to find that common language.

Does one size really fit all? Is your pension invested in the default fund? Does the one size fits all approach really fit with your individual situation and goals. It's time for you to find out exactly what your workplace pension is invested in and engage in how your pension is managed!

A new approach is definitely needed but with a balanced approach to liquidity and risk.

Some promising priorities announced by Labour … a bigger mutual sector, streamlining regulation aligned to consumer duty, exploring longer term fixed rate mortgages, focus on fraud prevention, a roadmap for open finance and last but not least, a review of the pensions and retirement landscape with new powers for the TPR to bring about consolidation where schemes aren’t delivering value for money, adopting the Solvency UK reforms to unlock the productive use of solvency capital for infrastructure and green investment and an opt-in scheme for DC funds to invest in UK growth assets via a British ‘Tibi’ scheme (modelled on the French version).