In an open letter, British Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak are calling on the U.K.’s institutional investors to follow the lead of Canadian and Australian pension funds by making more long-term, illiquid investments.
“Currently global investors, including pension funds from Canada and Australia, are benefitting from the opportunities that U.K. long-term investments afford, while UK institutional investors are under-represented in owning U.K. assets.”
The letter called on British institutional investors to participate in an “investment big bang” in order to help restart the British economy. “To seize this moment, we need an investment big bang, to unlock the hundreds of billions of pounds sitting in U.K. institutional investors and use it to drive the U.K.’s recovery. It’s time we recognized the quality that other countries see in the U.K. and back ourselves by investing more money into the companies and infrastructure that will drive growth and prosperity across our country.”
Johnson and Sunak also alluded to the fact that the U.K. has developed a reputation among institutional investors as a poor target for making long-term illiquid investments. The pair wrote that, under Johnson, many barriers to these investments have been eliminated.
“We recognize the responsibility of the government to remove obstacles and costs to making long-term, illiquid investments in the U.K. The government is doing everything possible, short of mandating more investment in these areas as some have advocated, to encourage a change in mindset and behaviour among institutional investors and we remain open to addressing further barriers where they are identified.”
The letter also highlighted the launch of the U.K. Infrastructure Bank, a financial institution designed to lower the barriers to making illiquid investments within the U.K. “To help with this, our new U.K. Infrastructure Bank is open for business and is ready to co-invest in green infrastructure and support regional economic growth.”