UK Capital Markets Revival: There for the Asking

Trigger sustained high inflows after the Derisking Overshoot by UK DB pension schemes.
 
Cash inflows to bring a UK Capital Market revival can come from existing UK DB schemes becoming investment long-termists.  The bounce back from the derisking overshoot means far more money is available for productive asset purchases than is assumed.  Reversing the long years of cash outflows, weak ratings and sector decline is there for the asking.  Get stuck in.  The case is straightforward.  Risk for members is low and scope for improvement for members and sponsors is very high.  

Leaving the pension advisory sector to its own devices has been a disaster for members and sponsors.  Expect the reassessment to be on the way.
 
Why now?

• Chancellors Hunt and Reeves have changed the political direction post the LDI debacle. FRC and DWP regulations require DB scheme strategy resets. Be keen to hear the outcome.
• De-risk and get rid ASAP” endgame plans are designed to address remote problems at unnecessary costs and by giving up available upside for nothing. Unacceptable.
• Surpluses in schemes can be used to improve pensions and cut / eliminate pension costs for today’s employees. Why not?
• Ask sponsors, trustees and their advisors about their risk-benefit analysis.  Say you will be looking for their publication of an updated Statement of investment Principles.

Your engagement will result in the sector scrambling to self-correct.  No need for you to have a direct investment in the sponsor– it’s about those with the money to invest and who should look to asset manages for new approaches.  Major international groups are prime targets.
 
You and DB schemes:  Show awareness and interest.  Expect Boardrooms to have a DB pension funding refresh in the next year.  Rarely can you achieve so much by doing so little.  An expectation that more money will come into markets will re-energise The City.  Read the attached “DB pension schemes – a productive asset investor perspective”.
 
And to reflect on the economic damage caused by what Lord King and John Kay call the biggest unforced policy error of the century, read the case study, based on its accounts, of Michelin Tyre.  “No Grip. No Stars”. 


Better pensions are also there for the asking.  There's a theme developing here....