I have had time for Ros Altmann throughout the journey for thePension Schemes Bill, until that is she had a change of mind with regards Mandation. But heh – the two houses fudged a way through to make sure we didn’t lose precious legislation.
And there was a bonus, Ros and Sharon Bowles have finally got investment trusts to count in the Mansion House Accord and I hope that I’ll own a few in mine before I die! Here is a report on how the bold ladies got their way.
This blog was a supporter and a signatory to Ros and Sharon’s initiative. You can read the original account here
‘Common sense prevails’ as Pensions Schemes Bill passes with investment trusts included
Following industry pressure
Investment industry figures have welcomed the inclusion of listed investment companies (LICs) within the government’s flagship Pension Schemes Bill after the House of Lords accepted a final draft on Tuesday (28 April) evening.
The move has been described as “a sensible, pragmatic step and a real victory for common sense”, after pensions minister Torsten Bell previously suggested listed equities would be excluded as they “do not invest new money”.
One in five UK adults have never heard of investment trusts amid ‘confidence gap’
Campaign groups have spent the last two months pressuring the government to include investment trusts as a ‘qualifying asset’ in the Pension Schemes Bill.
Members of the House of Lords, fund managers, CEOs and investors in UK trusts penned a letter to the minister in February, urging him to include investment trusts in the bill to encourage increased pension fund investment in the UK.
On 5 March, more than 300 prominent voices within the investment industry – including the London Stock Exchange Group, CFA UK and Association of Investment Companies CEO Richard Stone – also signed a letter to Bell in protest against the exclusion of LICs from the initial draft of the bill.
Following the passing of the bill, Stone said the changes will have an immediate impact on fulfilling pension scheme commitments under the Mansion House accord and that “common sense has prevailed”.
Liquidity a ‘limiting factor’ to wider investment trust adoption
“Investment companies are a proven structure for investing in private assets in the UK. It is common sense that investment companies should be considered a legitimate way of accessing these assets,” the CEO added.
Fidelity International’s head of investment companies Claire Dwyer welcomed the move, as did Christian Pittard, head of closed‑end funds at Aberdeen Investments, who said a framework that focuses on assets rather than structure “will make it easier for pension schemes to deploy capital more effectively and at scale”.
“Investment trusts have long played a critical role in channelling capital into long-term opportunities underpinning innovation and economic growth,” Dwyer added.
“Giving pension schemes greater scope to invest through the structure should enhance choice, support member outcomes and add further breadth to the UK’s capital markets.”
FCA urged to include single- or dominant-asset structures within closed-end investment companies
Anthony Leatham, investment companies analyst at Peel Hunt, credited House of Lords members Sharon Bowles and Ros Altmann, alongside the AIC and other industry bodies, for ensuring that the outcome reflects practical investment realities.
He explained that, while there was no guarantee of an increase in immediate demand, bringing investment companies into scope was “strategically important”, providing incremental support for the sector and helping to narrow discounts over time.
“In a market where semi liquid vehicles are increasingly promoted as access points to private markets, this development also reinforces the case for the closed-ended structure as the most appropriate way to offer daily liquidity against inherently illiquid underlying assets,” Leatham said.