I am very pleased to see a story on the importance of our stock markets to our economic well-being. A couple of weeks back the London Stock Exchange organised a group of the CEOs of companies quoted on its tiers of markets to call on Government to legislate so that pension funds get tax-payers support for schemes that invest through the UK market in companies quote on it,
The call has been for British companies seeking listings here not overseas.
Please don’t be put off having a look , most of the pages are the names of companies who have written to Rachel Reeves.
It will not surprise readers to read the names of companies among the 5,000 in this company who continue to run defined benefit for their staff and former staff. I hope that many will be in CDC pension schemes (UMES or retirement) by the end of the decade. But many companies founded in the UK are not quoted, mostly privately funded, some quoted abroad, most notably in New York
People who have never had to get funding for their company may think that it’s a little vulgar to do so. As if it were wrong that employers look to pension funds for investment. But pension funds provide precisely the long-term capital that businesses need to invest in the long-term themselves.
There has been a lot of criticism of this letter. I am uncomfortable with these comments.
Ros Altmann’s other view
Linking tax relief to self-investment in UK markets and through private equity that leads to public quoting is top of Ros Altmann’s agenda. She has argued that investment trusts/companies that form the backbone of our second tier (FTSE250) are largely ignored by workplace pensions for the idiocies of discounting and the way they must be quoted for charges under a charge cap and in a price war.
Hopefully the Lords will do something in the next few years to make workplace pensions – post the Pension Schemes Act , a more attractive proposition for schemes funded by people’s payments under auto-enrolment.
The views of Schroders in an FT article on Budget Day
Finally, I get to the article from Mary McDougall and Emma Dunkley that is so timely, this being a Budget Day.
“We have to be careful to call the death of public markets . . . they are super important to our futures, so they are definitely not dead,” Oldfield said, speaking at the FT’s Future of Asset Management conference on Tuesday.
Mike Oldfield like the CEOs of the companies calling for investment and Ros Altmann calling for investment in “investment companies”, sees investment in our companies by pension funds as critical to the future of our economy and the financial economy of all who work and live in the UK.
Oldfield goes on
“If our industry did not exist, the broader ecosystem doesn’t work because we are key to price formation and IPOs,”
Fundraising through initial public offerings in London slumped to a 30-year low in the first half of the year, with just five listings in the UK raising £160mn.
The dearth of companies looking to publicly list their shares in London has left some private market companies struggling to offload their holdings in the challenged IPO market.
Schroders and British Fund Managers
I am not always a great supporter of Schroders. I started my company in a WeWork opposite its palace in London Wall and we gazed at its staff restaurant with envy, it is more a hotel than an office.
But I last sat in there a guest with Rustom Smith discussing how organisations like Schroders can make things for people who work in companies as diverse as AgeWage and Tesco. This makes send (again from Oldfield)
“We are pretty fundamental to making sure there’s oil in the system that can grease the way the whole economy works,” he said, adding that public markets “provide transparency on companies” and “allow active asset managers like Schroders to engage with management around their strategies and hold them to account.”
Schroders are not here to run DB pensions out of town and into the hands of foreign owned insurers. They are here to make the next wave of investment in Britain happen.
What he says about Schroders working with privately owned funds does not stop him seeing his work with publicly quoted companies (such as Tesco) to move forward.
Despite Schroders’ push into private markets, Oldfield said he was “optimistic” about the outlook for public equity managers.
I hope we will be able to say that louder as the Pension Schemes Bill moves to Act and when the thrust of a Chancellor committed to Britain “growing”, is felt not just in pensions but in our country.
Whether PLSA or Pension UK, this is what our Pension trade scheme should be doing, I supported it in 2023 and support it now in promoting investment in the UK and its stockmarkets.
