This month’s Funds Europe looks at the need case for UK infrastructure investment and finds details have been set out several times already.
In November 2020, the government published its National Infrastructure Strategy. Its three objectives are to aid the nation’s economic recovery, to ‘level up’ the UK’s regions with the help of a Levelling Up Fund, and to have zero net carbon emissions by 2050.
Legal & General published its own report in 2020, called ‘The Power of Pensions’. This report suggested the size of the role for pension schemes to play and includes pension schemes looking to manage their liabilities through the pension risk transfer market – a mechanism whereby a company can offload pension payments to an insurance company.
The insurer says in its report: “It is clear that pensions and the [pension risk transfer] market have a significant role to play in plugging the £1 trillion infrastructure funding gap. Domestic, sterling-based institutional investors such as insurers and pension funds are providers of long-term, patient capital, which is naturally aligned with the requirements of the UK infrastructure market.”
The government itself recognises this, having a section in its National Infrastructure Strategy called ‘The Role of Pension Funds’. That report states: “There is a huge opportunity for pension funds to support the UK’s infrastructure investment ambitions. The industry anticipates that pension funds and insurers will be able to invest between £150 billion and £190 billion in infrastructure over the next ten years.”
Read the full article here: Infrastructure investing: Fulfilling the UK’s infrastructure needs
