The investment industry has welcomed the Government’s decision to include investment trusts in the Pension Schemes Bill.
Following repeated calls from the Association of Investment Companies and campaigners including Baroness Ros Altman and Baroness Sharon Bowles, the Bill completed its passage through the House of Commons and House of Lords on Tuesday evening.
The AIC had argued that excluding investment trusts from the Bill would be bad for competition and reduce choice for pension schemes. With the Government keen to support more infrastructure and renewable energy production, the AIC said investment trusts “provide a proven way” for investors to access these assets.
Richard Stone, chief executive of the Association of Investment Companies, said: “Thanks to the persistence of the AIC’s campaign and the excellent work of Baronesses Altmann and Bowles, common sense has prevailed.
“This amendment means that pension schemes will now be able to use investment companies to meet any requirement to invest in private assets such as infrastructure and private equity.
“This has an immediate impact, because it gives pension schemes the confidence to invest in investment companies to meet their Mansion House commitments. Pension schemes can now be assured that those investments will count towards any future requirement to invest in private markets.
“Investment companies are a proven structure for investing in private assets in the UK. It’s common sense that investment companies should be considered a legitimate way of accessing these assets.”
Claire Dwyer, head of investment companies at Fidelity International, also welcomed the news.
“This is a welcome and constructive step. Investment trusts have long played a critical role in channelling capital into long-term opportunities underpinning innovation and economic growth. 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.”
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