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Daily Insurance Industry News
Monday 23rd of April 2018
May 28, 2012

CBI: new slant on pension fund investment in infrastructure

by Gill Montia

Story link: CBI: new slant on pension fund investment in infrastructure

The Confederation of British Industry (CBI) is urging the Government to make infrastructure projects a more attractive investment prospect for pension funds.

In a new report entitled “An offer they shouldn’t refuse”, the employer’s body sets out four changes which it believes could make a real difference for institutional investors, as follows:

Targeting specific projects to enhance their credit rating and make them more attractive to investors.

Pooling pension funds beyond the Pension Infrastructure Platform (PIP) and building up in-house skills.

Commercialising the public sector’s approach to infrastructure and creating a single, attractive shop window for would-be investors

Ensuring Solvency II doesn’t act as a barrier to private investment.

According to the CBI, underpinning and lifting the credit rating of certain infrastructure assets would almost certainly draw in more institutional investors.

In particular, enhancing the credit rating of brand new projects would have a positive impact, as would a time-limited dividend tax credit for pension funds investing in new schemes.

CBI director-general, John Cridland, comments: “If we can capture just a fraction of the £1.5 trillion of capital held in UK pension funds, and invest a further 2% of their total assets in infrastructure, this would make a huge contribution to renewing our energy, transport and other infrastructure.”

 

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