USS backs Thames Water’s turnaround plan – did they have a choice?


Jo Cumbo of the FT has a scoop.

One of the largest investors in Thames Water has given its support for the utility as other industry figures sought to stave off any possible nationalisation of the sector. The £90bn Universities Superannuation Scheme (USS), which has a near 20 per cent stake in Thames Water, said on Friday:

“We have given our backing to Thames Water’s turnround plan,”

adding this required

an appropriate regulatory environment”.

The comments set the stage for crunch negotiations between Thames Water, its investors and the government over injecting more capital at a time when the sector’s future is the subject of intense political debate.

John Ralfe is right, they are now in no position to do otherwise

USS owns 20% of Thames Water’s equity. The existential threat to this stake is that the Government is brutal and nationalises Thames Water leaving the equity holders with nothing. A bit like Tottenham not selling Harry Kane this year.

I called on the Government to be brutal, if it turns out to be a straight choice between bailing out the investors or privating Thames Water.

The investors have so far come up with £500m to keep Thames Water solvent. They are expected to find another £1.5m and could – if others do not put their hands in their pockets – increase their equity stake.

As it stands, pension funds own well over half of Thames Water. A YouGov poll in 2022 suggests 58% of Conservative votes would want to see Thames Water back in private hands. USS must fear privatisation beyond all things.

But USS may be talking to the likes of the CEO of Severn Water who in an email seen by the FT says.

“One idea we believe might be attractive to the Labour leadership is repurposing utilities and utility networks into a new breed of declared social purpose companies — companies that remain privately owned, who absolutely can (and should) make a profit, but ones that also have a special duty to take a long-term view.”

That sounds very much like a solution that aligns with what Pension Schemes should invest in. It prompts the question, “why is Thames Water not in such a vehicle now?”

The river Thames and Cockermouth Common


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions and tagged , . Bookmark the permalink.

4 Responses to USS backs Thames Water’s turnaround plan – did they have a choice?

  1. John Mather says:

    As they say the river is about to hit the fan

    • Tim Simpson says:

      From what the reports give as to what has been going here (and the photo above) a particular song comes to mind:

      ‘Once a jolly swagman camped by a billabong’ (etc)

  2. Dave Adams says:

    Perhaps it’s worth remembering that, in taking an expanded stake in Thames Water, USS was heeding a Government call for pension funds to help spur UK economic recovery:

    “Even before Covid, the government announced hugely ambitious plans to upgrade the UK’s infrastructure and since the pandemic, the Prime Minister and Chancellor issued a letter to institutional investors including pension schemes calling for an investment “Big Bang” moment. USS already invests more than 45% of its £82.2bn under management in the UK and our new investment in Thames Water is a clear demonstration that we are happy to do more …” – USS statement Dec-2021

  3. henry tapper says:

    Well made points Dave, though the concentration of investment in Thames still rankles with some members – judging by my email bag

Leave a Reply