The PLSA has set out a series of actions for government to make key areas of productive finance more investable for pension schemes.
These include reform of the planning processes for renewable energy assets, social care facilities and social housing, and the provision of certainty over public and private sector financing expectations and commitments.
Nigel Peaple, director of policy and advocacy at the PLSA, said: “The UK has considerable need of greater investment to achieve the government’s goals on growth and the transition to net zero.
“Pension funds have an important part to play in achieving greater investment in the UK where this is consistent with achieving the right returns for pension savers.”
Peaple highlighted the association’s ongoing support for the Mansion House Compact and its engagement with the body establishing the National Wealth Fund.
Investing in the UK
“Our new report looks at how to create more investable opportunities in the UK by identifying the pension fund and government actions needed and calls on all parties to work together to achieve these goals,” Peaple added.
Pension schemes already invest approximately £1trn in UK assets, the PLSA said, primarily through government and corporate bond allocations.
To support the government’s aim to get pension schemes allocating more to alternative UK assets, the PLSA has set out specific requirements and suggestions for sectors including energy, property, social housing, later life care and transport.
Facilitating pension scheme investment into these areas “has the potential to result in significant tangible real-world benefits for society”, the PLSA said.
The role of trustees, asset managers and consultants
The PLSA's report also set out a series of recommendations for other stakeholders. Trustees, the association said, should seek to incorporate UK private market assets into their investment strategies in a way that meets the needs of their members. They should also seek training where needed and make sure their statements of investment principles are clear on their approaches and reasoning.
For asset managers and private equity firms, the emphasis was on collaboration with pension schemes to identify the right opportunities. The PLSA also urged firms to be transparent over fees, to be active shareholders and to "be alive to the risk of greenwashing".
The association encouraged investee companies to work with the government to ensure their needs were met, while also embracing innovation and engaging in discussions about how to improve the UK's appeal as an investment destination.
Across all these areas, the PLSA said consultants would play a "vital" role in connecting the private and public sectors and shaping investment strategies. The association reiterated its call that investment consultants should be regulated by the Financial Conduct Authority.
Read the PLSA's full report here.
