Growing Pensions Performance & the UK Economy
Private market allocations are growing at many pension funds, especially within the LGPS and increasingly at larger DC schemes and Master Trusts, based upon the belief that these investments will deliver both attractive long-term performance as well as diversification benefits and positive societal impact. In addition, the UK Government has embarked on an ambitious programme to encourage the pensions industry to invest further still in private assets, especially through the creation of the British Growth Partnership administered by the British Business Bank, as well as calls for consolidation among both LGPS and DC plans as announced at the Mansion House.
While opportunities abound, key to a step change in these investments will be to ensure that fiduciary and due diligence obligations are satisfied, and that vehicles can be developed that overcome scale, size and track record requirements, especially in earlier stage venture capital projects.
The conference will gather many of the major investors and asset allocators across the UK pensions industry, together with government-backed organisations, private investment managers and other leading stakeholders. A comprehensive picture of the state of pensions investment in private markets will be presented, followed by extensive debates on the contribution that these assets will play in the future success of the industry and for the economy at large.
In common with all SGPE Masterclasses, the conference will be highly interactive, with free and frank exchanges of views, a focus on original and thought-provoking content, and with participants encouraged to engage and contribute proactively throughout.
Chair
Mark Hedges
Trustee Director
Nationwide Pension Fund
Keynote Speaker
Chris Pond
Chair
Financial Inclusion Commission
Agenda
Devil's Advocates (Morning Session)
TBC
A panel of Devil’s Advocates will be on duty for the course of the morning.
They will be available to pose challenging questions to any of the conference speakers when invited to do so by the Moderator of each session. They will provide an end of day summary of the main learning and action points from the conference.
09.15 – 09.45
Meet & Greet
09.45 – 10.00
Welcome & Introduction
Conference Chair:
Mark Hedges
Trustee Director
Nationwide Pension Fund
Programme Director:
Stephen Glover
Director
SG Pensions Enterprise
10.00 – 10.30
Presentation: The Private Markets Landscape in the UK
- Define Private Markets: not an asset class but a collection of asset classes? How are they currently being used, and what characteristics make them attractive to an asset owner?
- Historic trends in the private market investments across main pension sectors – LGPS, DB and DC and in workplace pensions, covering key metrics such as size, growth, performance.
- For each of the private asset classes, what is the future capacity, especially given the government push in this area? i.e. define the opportunity set and the investment universe.
- Given the great governance burden and greater costs, are private markets really a viable investment for the average pension scheme? What conditions make them viable?
10.30 – 10.55
Presentation: Why Investing in UK Will Be Good for Pensions
For the Government’s growth and “Buy Britain” agenda to be fully realised, pension funds and other asset owners would need to increase their allocations to venture capital investments. This has been historically subject to significant obstacles – including size limitations, higher risks, absence of track records, lack of research and in-house expertise – which have made it understandably challenging for pensions trustees to justify investment in these assets.
Our speaker will make the case for the new Government initiatives, the proposals and backing designed to circumvent these obstacles, and how they will benefit pension schemes investing in private markets beyond their existing commitments.
10.55 – 11.35
Panel Discussion: How Can the Government Support Pension Investment in Private Markets?
Sally Bridgeland
Chair
Brunel Pension Partnership
Ian Connatty
Deputy CIO
British Business Bank
- Explain the nature of the British Growth Partnership, the British Business Bank and the UK Investment Bank (National Wealth Fund) and how they interlink with the Mansion House Compact and other government initiatives.
- How these organisations plan to encourage and assist pension investment in private markets.
- Debate the commonalities and divergences in purposes and investment objectives between them and the priorities of pension investors.
- Discuss how the wider investment industry fits in: private pensions, wealth managers as well as insurers through DB risk transfer strategies.
11.35 – 12.00
Coffee Break & Networking
12.00 – 12.20
Case Study 1: Investing in Natural Capital
Rob Gardner
CEO & Co-Founder
Rebalance Earth
Speakers will present examples of one or more successful nature-focused investment strategies which achieve the joint objectives of achieving positive impact, mitigating nature loss and generating strong investment performance.
There will be a focus on the fiduciary and financial decision criteria, expected nature and return outcomes, and lessons for other investors.
12.20 – 13.00
Panel Discussion: The Investment Realities for Pension Funds
Ruston Smith
Chairman
Tesco Pension Fund
Speakers from a corporate pension fund, a LGPS scheme, two managers and a consultant discuss the government’s private markets allocation targets for pension schemes against the realities at the coalface.
- Do the government’s objectives square with schemes’ own investment plans for private markets and venture capital?
- What is the role of the various PM strategies in asset allocation?
- How do the opportunities differ between LGPS and corporate schemes?
- Which investments and products are they each most interested in, and for what purposes?
- How are schemes and their advisers seeking to overcome some of the key constraints to greater involvement in private assets?
13.00 – 14.10
Lunch & Networking Exhibition
Devil's Advocates (Afternoon Session)
TBC
A panel of Devil’s Advocates will be on duty for the course of the afternoon.
They will be available to pose challenging questions to any of the conference speakers when invited to do so by the Moderator of each session. They will provide an end of day summary of the main learning and action points from the conference.
14.10 – 14.30
Presentation: Optimal Implementation - Finding the Right Access Routes
There are multiple investment vehicles that can be chosen to access private market assets. These include direct investment funds, co-investment, funds-of-funds, LTAFs, investment trusts and others. Trustees need to understand their relative merits and which vehicle is best suited both to the type of pension scheme and the nature of the investment.
Our speaker will explore the pros and cons of these different routes to market, and shed light on the many complexities. They will also discuss whether new vehicles are being developed which will accelerate pensions investment into venture capital projects in line with the government’s agenda.
14.30 – 14.50
Case Study 2: Successful Implementation of a DC Illiquids Strategy
The CIO of a DC Plan / Master Trust, alongside one of their managers and an investment platform, describe how they have implemented a successful illiquids programme within their default strategy, in face of daily dealing, the charge gap, and cost competition.
They will discuss how they overcame these constraints, the key decision criteria, the investment vehicle chosen, and the expected returns, risks and outcomes for the scheme and its members.
14.50 – 15.30
Roundtable Discussions
The Critical Decision Factors in Private Markets Investing
Facilitator:
Paddy Dowdall
Assistant Executive Director
Local Investments & Property
Greater Manchester Pension Fund
Roundtable Moderators:
TBC
Following a scene-setting introduction, a Moderator at each table will lead a discussion on the key decision factors facing asset owners in allocating private markets, especially in light of the Government’s initiatives in this area. These will embrace fiduciary duty, due diligence costs, required hurdle rates, valuation methodologies, liquidity and scale considerations and appropriate investment vehicles, while taking account of the different priorities and constraints for LGPS, Corporate DB and DC schemes.
Several of the Moderators will be called upon to summarise their conclusions to the overall conference on the viability of Private Markets investing in the current environment.
15.30 – 15.50
Case Study 3: Delivering Scale Benefits to Smaller Funds
An example of an LGPS pool using scale to enable access to private market investments to one or more of their partner funds which would otherwise be hard to accomplish. How they went about it, the solutions they came up with and the lessons for others.
15.50 – 16.10
Case Study 4: Delivering Returns & Impact Through Local Investment Opportunities
A LGPS fund, alongside one of the managers, describe how they have implemented a private markets investment strategy of distinct benefit to their local economy. They will discuss the due diligence and fiduciary duty criteria, the decision process involved, and the expected returns, risks and outcomes for the fund, the members and the community.
16.10 – 16.40
Coffee Break & Networking Exhibition
16.40 – 17.10
Panel Discussion: Investment Opportunities in Housing
The need to increase the UK’s housing stock is urgent in many areas of the country. This is true for both residential and social housing, while housing conditions are also an enormous factor in addressing health inequality. In turn, housing investments present both income and growth opportunities for investors at manageable levels of risk in many cases.
Our speakers will discuss investable opportunities in both private equity and private debt strategies in the housing market and the value proposition for LGPS, DB and DC schemes.
15.50 – 16.10
Panel Discussion: Investment Opportunities in Infrastructure
Similarly, the UK has ambitious plans for a wide variety of infrastructure projects, which will require significant investment of private capital to come to fruition. Like housing, infrastructure investing can be tailored to deliver significant income, growth or a combination of both, depending on investor needs, and can be adapted to a range of risk profiles.
Our speakers will discuss investable opportunities in both private equity and private debt strategies in the infrastructure sector and the value proposition for LGPS, DB and DC schemes.
17.40 – 17.50
Devil's Advocates' Summary
The Devil’s Advocates will offer their summary and main takeaways from the conference’s proceedings.
17.50 – 18.00
Chair's Closing Remarks
18.00 – 19.30
Drinks Reception & Networking
Speakers
Peter Ballard
Head of Trustee Delivery
Railpen
Shalin Bhagwan
Chief Actuary
Pension Protection Fund
Con Keating
Head of Research
Brighton Rock
Andrew Krousti
Head of Pensions
Capgemini
Russell Lee
Head of Insurance Solutions
M&G Investments
Charlotte Moore
Freelance Journalist
Independent
Morten Nilsson
Chief Executive Officer
Brightwell Pensions
Gurbani Swanni-Leach
Head of Endgame Solutions
M&G Investments
Sponsors
Click on images for more information
Venue
This event will be held at the Ironmongers’ Hall in London.
Nearest Tube/Underground Stations (Tfl)
Barbican (Circle, Metropolitan, H&C - 2 mins)
St Paul's (Central - 6 mins)
Moorgate (Circle, Metropolitan, Northern, H&C - 10 mins)
Farringdon (Circle, H&C, Elizabeth - 11 mins)
Nearest Train Stations (National Rail)
Farringdon (11 mins)
