In October, the grey pavements of my London street gain a splash of colour when red and yellow leaves fall and cover them. This was another month filled with podcasting. Three new episodes of The Professional Investment Podcast went live this month. In the first, Bobby Riddaway and I discussed that rarest of unicorns – a positive sustainable story! In the second, Joe McDonnell talked about the importance of changing the fiscal rules. And in the third, Catherine Howarth explains the lessons of the Thames Water fiasco. Two more Pensions for Purpose podcasts also went live this month. In one we discussed how to make passive indices more sustainable and in the other we talked about how insurance companies would incorporate sustainability into the buy-out bonanza assets. My latest feature for MandateWire was also published which asks whether LGPS funds should produce employer-specific investment strategies. I also travelled to Liverpool this month for the PLSA’s annual conference. It was great to be in this waterside city again for a whirlwind few days of making new connections and strengthening existing ones.
Solar energy and Chinese EVs could drive down global emissions
In the second episode of The Professional Investment Podcast Bobby Riddaway shares his news story of week which discusses how the rise in solar energy and Chinese EVs could drive down global emissions. We could be close to peak carbon which should galvanise UK pension schemes into doing more to help combat climate change. We discuss the benefits of moving the focus away from reporting and towards a focus on transitioning portfolios as well as the different levers available to large and small schemes.
Pension funds call for change to boost infrastructure investment
In the third episode of The Professional Investment Podcast, Joe McDonnell, CIO of Border To Coast Pensions Partnership, explains why pension schemes are urging the government to change the fiscal rules. His news story of the week covers a blueprint produced by IFM Investors with around 20 concrete changes the government needs to make to achieve its net zero targets by 2030. We discuss how the government can make the UK investable, the role LGPS can play and how to balance local responsibilities with broader national goals.
Thames Water: a cautionary for investors and government
In the fourth episode of The Professional Investment Podcast, Catherine Howarth OBE, chief executive at ShareAction, explains why Thames Water is seeking up to £3bn in emergency loans is her news story of the week. We discuss why this utility company’s history is a cautionary tale for both institutional investors and policy makers and how to improve the management of utility companies. We talk about the benefits of including more stakeholders at the table and why this issue is so important given the current government’s commitment to getting pensions schemes to invest more in infrastructure.
Passive investment and sustainability
The auto-enrolled workplace pension scheme is the UK’s largest driver of future retirement wealth. According to the Pensions Policy Institute’s ‘DC Future Book 2023’, this market is projected to reach approximately £800bn by 2030. These workplace pension schemes rely heavily on passive equity investments to generate returns. In this episode, I’m joined by Charlotte O’Leary, CEO at Pensions for Purpose and Keith Guthrie, head of sustainability at Cardano UK and NOW:Pensions.
The impact of improved funding levels on pensions
The buyout boom is one of the most significant trends to affect the UK pensions industry in recent years. Last year, around £50bn was transferred from closed corporate defined benefit pension schemes to insurers. It’s estimated to be £60bn this year and with new market entrants, could hit £100bn a year. In this episode, I’m joined by David Brown, senior director from Pensions for Purpose along with Paul Kitson UK head of pensions consulting at EY, and his colleague, Ben Grainger, a partner at EY, to talk about how insurance companies are investing those assets sustainably.
Should LGPS funds introduce employer-specific investment strategies?
Do LGPS funds require more employer-specific investment strategies? That’s the question my latest article for MandateWire examines. You might think each of the 86 local pension funds just provide pensions for employees of each individual authority but you would be wrong. More than 18,000 employers participate in the LGPS! Having a single investment can be problematic if employers have different goals. One employer might be struggling with its budget and want minimise contributions while another employer might be in a stronger financial position and aiming to reduce risk through higher contributions. But consultants warn against too many different strategies as this would add complexity.
PLSA’s annual conference
Did you know Liverpool has nine miles of docks? Me neither. But it is one of the delights of visiting this city. If you choose the right hotel, you can have delightful morning commute along the banks of the Mersey to the conference centre every day. Though it wasn’t until the last day that the weather played ball and provided the sunshine to make it picturesque! I was in my happy place during those three days spent in the exhibition hall, making new connections and strengthening old ones. Nothing beats meeting face-to-face especially when everyone is in the mood to chat!
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