‘Open your minds’ to patient capital, Treasury urges trustees

Written by Theo Andrew
6/12/18

Trustees must open their minds to a different range of investments on patient capital and other illiquid investments, Exchequer Secretary to the Treasury, Robert Jenrick, has urged.

Speaking at the Pension and Lifetime Savings Association’s (PLSA) Trustee Conference today, 6 December, Jenrick said that the opportunities for investment are “pretty broad” but that they must meet the requirements of the scheme and the savers.

Jenrick was speaking at the launch of the PLSA’s guide on patient capital investment, The long-term view: Patient capital and illiquid investment, following the bodies role as part of HM Treasury’s Patient Capital Pensions Investment Taskforce.

He said: “The UK is a leader in social impact investment and we’d like to see that continue. There are many avenues in which you can do that, the definition is pretty broad. So there are opportunities in for investment in sports facilities … environmental investments, investments in public sector facilities, healthcare for example.

“It’s a mindset, to open your minds to a whole range of different investments, that, of course, meet your requirements, providing the return you are looking for, for your savers.”

The news follows the recent Budget announcement which looked to pave the way to use billions of pounds of defined contribution pension money to fund fast-growing British technology companies.

Despite this, the government is thought to be looking beyond patient capital to wider illiquid investments, it has been suggested.

“You are trustees, independent governance committees and advisors to them, it is not for government to tell you what to do. You have to make the right decision for yourselves and your savers,” Jenrick added.

“However, I believe if we continue to work together it must be possible to be responsible managers of other peoples savings, and also ambitious custodians of a great untapped pool of capital in this country.”

The guide pulls together case studies from PLSA members – both pension schemes and asset managers – who have already been investing in a long-term and patient capital way in illiquid assets and showcases their experiences, successes and lessons learned.

It covers the full spectrum of patient capital approaches including infrastructure, impact investment, private equity and debt. It is hoped that the guide will support and encourage schemes to think about incorporating illiquid investments into their portfolios.

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