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Rachel Reeves will launch an initiative next week with 20 of the UK\u2019s largest pension funds to encourage easier investment in Britain in a move to replicate Canada\u2019s so-called \u2018Maple 8\u2019 model.<\/p>\n
The Sterling 20 initiative will try to make it more seamless for pension funds to back British infrastructure and growth projects, and stems from the chancellor\u2019s desire to mimic Canada\u2019s powerful pension investment model. <\/p>\n
The organisations joining forces in Sterling 20 include the Universities Superannuation Scheme, Legal & General, People\u2019s Pension, the Pension Protection Fund, Pensions Insurance Corporation, NatWest Cushon, Pensions UK, Rothesay and Mercer, according to three people familiar with the talks. <\/p>\n
Between them the pension funds have around \u00a33tn of cumulative assets under management. It is expected that local government pension funds will also join in the spring.<\/p>\n
Two people familiar with the talks questioned the wisdom of billing the initiative as Sterling 20, given that NatWest Cushon has been put up for sale by the high street lender and could be bought out by a rival \u2014 meaning there could only be 19 in a matter of months.<\/p>\n
The scheme, which is being led by the City of London Corporation alongside the Treasury, is hoping to make it more attractive for international investors to also back regional infrastructure projects by showing \u201cthere is British skin in the game too\u201d, according to two other people familiar with the talks. <\/p>\n
The Sterling 20 initiative follows on from the Mansion House Accord, a voluntary commitment earlier this year from 17 of the UK\u2019s largest pension providers to invest at least 5 per cent of default fund assets in UK private markets by 2030. This new move will try to plot the ways that funds will be better matched to UK investment projects, according to four people. <\/p>\n
Pension funds are not being mandated to invest, prompting one person familiar with the plans to say that there needed to be some projects backed quickly to avoid it being seen as just a branding exercise. \u201cAs with most things in this government we\u2019ve had enough of talking about things, we need delivery now,\u201d they said. <\/p>\n
A City of London Corporation spokesperson said: \u201cThe Mansion House Accord is a landmark agreement aimed at unlocking pension investment to drive UK growth. The City of London Corporation continues to work closely with industry and government to deliver on the Accord\u2019s commitments.\u201d<\/p>\n
The scheme is expected to be announced alongside the UK Investment Summit, which is being held at Edgbaston cricket ground in Birmingham next week. The summit has been billed as a regional version of last year\u2019s Investment Summit, which focused on trying to attract foreign capital into the UK and allowed the chancellor to announce \u00a363bn of private investment. <\/p>\n
A number of City sources said pressure and lobbying from government aides had been intense for so-called \u201cannounceables\u201d \u2014 a jargon term for company investments \u2014 for this year\u2019s summit. However, the package of investments due to be announced is expected to be easily dwarfed by investments announced alongside the India trade deal<\/a> and US state visit<\/a>. <\/p>\n Blackstone, which last month committed to \u00a3100bn in the UK over the next decade, will be attending the event in Birmingham alongside 250 executives. These include representatives from firms such as Coreweave, Deutsche Bank, Lloyds, Metro Bank, Morgan Stanley, HSBC, BMW and Babcock International, according to documents seen by the Financial Times. The summit is being sponsored by IBM. <\/p>\n Chinese online retailer JD.com is due to attend, just over a month after plans were aborted to buy Sainsbury\u2019s Argos business.<\/p>\n Rachel Reeves is also set to announce other initiatives to encourage public-backed financing. One will be a tie-up between eight institutional investors including the National Wealth Fund and British Business Bank to enhance co-ordination.<\/p>\n The bundling of public investment funds has been dubbed \u201cPufins\u201d and is being designed so that projects and growth businesses can find it easier to work with them, rather than navigating confusing different initiatives. <\/p>\n A new agreement has also been drawn up between the NWF and the most advanced mayoral combined authorities, according to three people familiar with the plan, with a view to simplifying regional access to its financing.<\/p>\n There had been little local uptake of the NWF so far, according to those people, because of red tape, borrowing costs and in some cases a lack of local expertise in building up credible investment proposals.\u00a0<\/p>\n A Treasury spokesperson said: \u201cThe Regional Investment summit will connect government, investors and local leaders to drive growth in every region and put more money in people\u2019s pockets.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":203941,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":["post-203940","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/203940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=203940"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/203940\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/203941"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=203940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=203940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=203940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}