Recent blue skies have perfectly offset local displays of pale pink cherry blossom and heralded the start of a new season. The first month of spring brought the publication of two recent articles. One chartered how private markets have become a popular option for pension schemes while another examined the post-Brexit impact of new EU sustainability regulations on UK pension schemes. I added to my UK Pensions Challenges series with an examination of how pension coverage has dwindled among the self-employed. And I ended the month by discussing the implications of the Deliveroo flotation on Times Radio’s Early Breakfast show.
The private market universe
In this article for the PLSA’s viewpoint magazine I discuss how private markets have become a popular option for pension funds because their risk-return profile is good match for these schemes’ investment goals. While closed defined benefit schemes blazed the trail in this asset class, open DB and defined contribution schemes are following in their wake and expanding the investment universe.
The Brussels effect: meeting ESG rules despite Brexit
Despite Brexit, this piece for Professional Pensions illustrates how indirect impacts from new EU regulation are going to affect both asset managers and pension schemes. The taxonomy and the financial-services related disclosures will have significant implications. The exact affects on pension schemes will depend on how far the UK government matches these new regulations. But the adoption of these standards will change how products are structured and sold. And the ‘Brussels effect’ means these regulations could become the new gold standard.
Pensions for the self-employed
According to the Institute for Fiscal Studies, the proportion of the self-employed which saves for a pension declined to 16% in 2018 from 48% in 1998. In contrast the Office for National Statistics says 77% of UK employees were members of a workplace pension scheme in 2019. This is a significant increase from 47% in 2012, when auto-enrolment was introduced. This post examines who are self-employed and what could be done to reverse this decline.
Deliveroo: a sustainable investment parable?
Deliveroo shares plunged as much as 31% today making it the worst performing UK IPO in decades. The flotation was shunned by UK fund managers, some of whom were concerned by the company’s employment practices. Others baulked at the dual-class share structure which allows the founder to retain control of the company for three years. Given the increased pressure on pension schemes to hold companies to account over, for example, bad labour practices it is hardly surprising investors sat on their hands. I discussed this and the implications of the UK government’s proposal to woo more companies with dual-class share structures to list in the UK during the Times Radio’s Early Breakfast Show yesterday morning.