The UK must improve access to attractive private market investments rather than focus on pension allocation targets, according to Pensions Management Institute (PMI) chair Ruston Smith.
In a new blog, Smith called for an effective UK investment “shop window” to help pension schemes identify opportunities in infrastructure, real assets and private companies.
“The UK doesn’t have a pension capital problem. It has an investability problem. Private markets should not and need not be a policy lever to be pulled,” he said.
“Appropriate, attractive investable UK private market opportunities should be a natural part of long-term pension fund allocations – and is particularly relevant to trustee boards of schemes with the appropriate skill, experience and scale.”
Smith argued that stronger governance, operational capacity and access to effective advice would be essential to helping schemes turn investment intentions into decisions.
He also highlighted the importance of trustee capability, high-quality reporting and long-term thinking when assessing private market investments, all areas being championed by the Pensions Regulator.
Connecting capital with opportunities
Smith pointed to the City of London Corporation’s recently launched InvestConnect platform as a potential way to help institutional investors identify and access suitable UK investments.
The initiative follows calls from Dame Susan Langley for stronger connections between institutional capital and projects capable of supporting economic growth.
Smith said: “The City of London Corporation’s InvestConnect has the real potential to act as a critical catalyst in connecting opportunity to institutional investment. Get the plumbing right, and it will facilitate more efficient access to investment, improving outcomes for savers and supporting a more productive UK economy.”
Bronek Masojada, incoming Lord Mayor of the City of London, said the corporation identified a barrier between pension capital and investment opportunities and developed InvestConnect to address it.
He said: “This City of London Corporation-led initiative will provide a real catalyst in connecting opportunity to investment – putting money to work, to grow the UK economy whilst growing UK pension members’ savings. It’s a real win-win.”
