UK pension funds are the most important source of investment in productive assets in the UK - AREF urges the Government to take the handbrake off.
Following the Chancellor’s statement at the 2023 Spring Budget AREF was delighted to make a submission to HMT for the Chancellor’s Autumn Statement. In the Budget, the Chancellor stated:
“… we need to build a larger, more diverse financing system, where the benefits of investment in high growth firms are available to more investors. So I will return in the Autumn Statement with a plan to deliver that. It will include measures to unlock productive investment from defined contribution pension funds and other sources …”.
AREF’s Submission makes a number of suggestions to help unlock that investment. In line with the agenda of the Government-convened Productive Finance Working Group (PFWG) and in support of the levelling up, regional generation and growth agenda, AREF takes “productive investment” to include that in commercial real estate and infrastructure, as well as other illiquid assets such as venture capital, private equity and private debt. Given AREF’s expertise, the thrust of the submission is focussed on facilitating investment from UK Defined Contribution (DC) pension funds into commercial real estate and measures which can then be generalised to facilitate investment into other illiquid assets.
AREF will soon be releasing a Policy Position Paper for members based on this Submission.