Push to put pension cash to work boosting UK growth hit by gilts crisis
The liquidity crisis engulfing the gilts markets has put at risk a government initiative to use pension funds to drive economic growth and the transition to a low-carbon economy, executives have warned.
As part of the government’s post-Brexit vision for the City of London, the UK regulator last year approved a new type of fund that enables investments in long-term, illiquid assets, including venture capital, private equity, private debt, real estate and infrastructure.
The “long-term asset fund” or LTAF structure is designed to give businesses and infrastructure projects greater access to capital from investors such as pension funds that have a longer-term investment horizon. The plan is part of a longstanding government goal to use the resources of the British economy more effectively, a target given still more importance by prime minister Liz Truss’s emphasis on growth.
Other executives said that alternatives firms’ fundraising plans could also be hit by the fallout from the pensions turmoil.
This story originally appeared on: Financial Times - Author:Harriet Agnew
