TPR Guidance Boosts Private Market Investments for Trustees

24th January, 2024

  • AKA: 36-6: where have all the Unicorns gone?

    I know you are now thinking of another England collapse at Lords, with David Lloyd trying to fill airtime looking for a group of supporters wearing daft outfits just a few yards outside the boundary, but this is actually much worse.

    According to The Beeb, last year only six UK companies became a unicorn, the title handed out to private start-up firms that are valued at more than a billion dollars. In 2021 36 unicorns were formed in the UK, and in 2022 there were 20. The only straw to clutch here is that the UK leads the way in Europe – Germany formed just four unicorns in 2023.

    So, to avoid the UK unicorn making the endangered species list, the FCA has been busy examining priorities for developing the UK listing regime, which include:

    • Strategies for making the UK’s listing regime more effective, competitive and easier to understand.
    • Assessing post-Brexit implications and priorities for tackling the reduction in the number of companies listing in the UK since 2008.
    • Maximising UK market competitiveness and increasing the attractiveness of the UK for investors.

    The Mansion House reforms also announced new investment vehicles to boost investment in productive finance, tailored to the needs of pension schemes and allowing investment into the UK’s innovative companies, with the Australian super fund already reported to have committed to invest 10bn AU Dollars to UK illiquid investments.

    TPR’s Emphasis on Effective Governance and Private Markets for Saver Benefits

    The announcement from TPR today continues this important development, with the publication of its 
    private markets guidance making it clear that with the right advice and effective governance, private market investments assets can play a valuable part in a diversified portfolio that aims to improve and protect saver benefits.

    Effective governance being the key operative, with the recent publication of the General Code, TPR has taken the opportunity to remind trustees that those who do not have the skills or resource to explore a more diversified portfolio should consider changing their governance model or consolidating. In the TKU section TPR adds

    “Review the current skills, experience, backgrounds and knowledge of your existing board, and consider whether further training is needed or whether to change the composition of the board, for example by appointing a professional trustee with experience in investing in these types of assets.”

    The Pensions Regulator

    UK unicorns should then become an exciting pension investment, particularly with the journey to a carbon neutral economy, where with the developments in private market investments we have an opportunity to embrace the critical Green Transition, with UK unicorns leading the way.

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    • Published byPaul Tinslay

      Paul Tinslay is a Professional Trustee for DB and DC Pension Schemes, including Chair for Sole Trustee positions, and EGLAS arrangements. With 33 years in the Life and Pensions Industry, Paul has the very rare, if not unique experience of...

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