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The leaders of leading funds warned during a Downing Street meeting that the feeling towards the London stock market is at “Rock Bottom” and urged ministers to consider imposing retirement funds in the United Kingdom to allocate at least 5% of their investments in national shares.
A group of specialists in British actions led by Nick Lawson, managing director of the Ocean Wall investment group, met Varun Chandra, the special government advisor to business, to discuss the means to revitalize public equity markets.
Fund managers highlighted their concerns about the state of the British equity market and the feeling of investors agreed with “rock bottom”.
Reunion has highlighted several challenges, including the fact that the crimes of the British market exceed the new initial public offers, an evaluation gap that is striking between British companies and American companies, and the point of view that British companies are increased on the good market by private shares and foreign buyers.
Participants also said that companies faced a “unhappiness loop” caused by national pension funds being net sellers of British actions for nine consecutive years.
The meeting came the day after the American catering delivery company, Doordash, concluded an agreement of 2.9 billion pounds sterling for the British Rival Deliveroo, four years after having floated in London with an assessment of 7.6 billion pounds Sterling and was nicknamed by one of its bankers “The worst Introduction in London History” – a quarter of its value on the first day of negotiation.
With a evaluation a major factor to decide where companies choose to list, prolonged British underperformance prompted them to look abroad, especially in the United States. Listing costs and governance charges have also been quoted as shifted.
Participants in the Downing Street meeting pleaded to increase the allowances of domestic actions to British pension funds, including by mandate.
Objectives of 5%, 8% and 10% were discussed as reasonable thresholds to consider, and there was a large agreement according to which defined contribution schemes should be priority over the defined service patterns.
“If retirement funds in the United Kingdom go to 10%, it would be a heroine stroke for the British markets,” said Lawson, adding that he was in favor of a “slightly guided mandation”.
Some participants in Reunion suggested that such a change could announce a much wider “virtuous circle” that would benefit businesses, markets and savers by restoring confidence and supporting assessments.
But the concept of mandate is very controversial.
The managers of pension funds claim that to make the investment objectives mandatory “would open a box of worms” and reduce their fiduciary obligation to guarantee the best possible return for investors.
Pension funds are supposed to sign this month to sign a voluntary pact – an update of the compact of the Maison du Manoir 2023 signed under the last conservative government – to invest 10% in private assets by the end of the decade, with half of this in the United Kingdom.
However, the FT understands that there will be no specifications to invest in listed actions.
Although former chancellor Jeremy Hunt considered the mandate, he did not present the policy before last year’s elections. Chancellor Rachel Reeves has not excluded the idea, but the ministers hesitate.
Mel Stride, Chancellor of the Shadow, said that the idea had a despair of despair, saying to the Financial Times this week: “Pension funds must be free to make investment decisions according to what is best for savers.”
Reunion fund managers included veteran actors such as David Cumming, head of British shares at Newton Investment Management, Andy Brough de Schroders, and Michael Stiasny, head of British shares at M&G Investments.
A person close to the reflection of the National Employment Savings Trust – the largest retirement regime for defined contribution in the United Kingdom, supported by the government – said that their priority was to invest in the best way for its members, but added that the fund had been public in their commitment to invest in the United Kingdom.
Nest, which manages more than 50 billion pounds sterling, said that around 1.75% of its total assets had been invested in British stocks at the end of March. Liz Fernando, director of investments at Nest, told the FT in an interview that she had “actively encouraged” all Nest partner managers to seek British assets.
A government spokesman said ministers were trying to ensure that “companies could access the funding they need to develop.” The spokesperson added: “It is true that we are committed to the stakeholders in this.”
“The final report of the journal of investments in pension will be published shortly and this will examine how to guarantee that any unlocked investment benefits the United Kingdom.”
