CBI backs move for London mutual fund
The CBI has backed a move from London’s councils to pool their pension funds in an effort to increase investment in the capital’s infrastructure.
London Councils, London’s local authority umbrella organisation, is in talks with the London Pension Funds Authority and the Treasury with a view to creating a new investment vehicle with up to £30 billion of assets.
The move to create a ‘London mutual’ would save on administrative costs for the councils that take part and free up cash for potential investment in housing, transport and other infrastructure projects.
The social housing sector has been looking for ways to attract investment from institutional investors, and pension funds in particular, with a number of local pilot projects in various stages of development.
‘These discussions are a welcome move, as pooling local government pension funds would not just reduce administrative costs it would also inject some much-needed investment into Britain’s ageing infrastructure, which is crying out for capital,’ said Katja Hall, chief policy director at the CBI.
‘Pension funds are natural investors in infrastructure and will want to invest in projects that are designed to give returns, so we now need to see other public sector funds coming forward in this way.’
A spokesperson for London Councils said: ‘Following a leaders’ committee meeting at London Councils in March, there was a commitment to explore further the proposals for the creation of a London pensions mutual, as a pan-London investment fund, from the amalgamation of the pension funds of the LPFA, TfL, London boroughs and the City of London Corporation. Further work will be reported back to leaders this summer.’