A new superfund to invest pensioners' money into fast-growing UK businesses is being mulled by life insurance and pension group Phoenix, the owner of Standard Life.
Echoing plans put forward by Chancellor Jeremy Hunt to get British institutions to invest more directly into the UK, Phoenix will pool cash to back life sciences and fintech businesses while earmarking capital for long-term projects, said the report.
The fund will launch later this year and meet Hunt’s call for at least 5% of workplace pensions' funds to be invested in unlisted assets by the end of the decade.
Phoenix currently has less than 1% of its more than £280 billion of total assets invested in this class of assets.
According to the weekend reports, smaller pension funds will also be able to utilise the fund and gain access to venture capital and high-growth companies backed by Phoenix.
Hunt, in last year’s Mansion House speech, expressed frustration at the seeming lack of belief among UK pension funds in companies based here. He first put forward the idea of a 5% investment in British start-ups during the speech.
Huge pension funds investing in start-ups and major infrastructure projects are a feature of Australia and Canada and these funds routinely now invest heavily in the UK, Hunt noted.
Some institutions, though, have pushed back against the scheme, saying that it is up to them to allocate pensioners' money where it will generate the most returns and not for political concerns.