New patient capital guidance launched by Minister at PLSA Trustee Conference

The Pensions and Lifetime Savings Association (PLSA) has today (Thursday) launched its new guide for trustees on investing in patient capital and other illiquid investments during its Trustee Conference.

Robert Jenrick MP, Exchequer Secretary to the Treasury launched the guide – The Long-term view: patient capital and illiquid investment – during his speech to the PLSA event and spoke about the work the government is doing to help pension schemes access long-term illiquid investments. It follows on from the PLSA’s role as part of HM Treasury’s Patient Capital Pensions Investment Taskforce, which looked at reducing the barriers to pension scheme investment in high-growth, innovative firms.

The guide pulls together case studies from PLSA members – both pension schemes and asset managers – who have already been investing in a long-term and patient capital way in illiquid assets and showcases their experiences, successes and lessons learned.

The case studies cover the full spectrum of patient capital approaches including infrastructure, impact investment, private equity and debt. It is hoped that the guide will support and encourage schemes to think about incorporating illiquid investments into their portfolios.

Caroline Escott, Policy Lead Investment and Stewardship, PLSA, said:

“Both defined benefit and defined contribution pension funds are ideally placed to reap the benefits of investing in a long-term way that can provide stable cash-flows as well as diversification benefits, to protect and grow the value of individuals’ retirement savings. We are pleased to be involved in government initiatives to remove the barriers preventing schemes from investing in illiquid assets – such as venture capital, private equity and infrastructure – and we are delighted the Minister has given the guide his backing during today’s launch.

“This guide – The long-term view: patient capital and illiquid investment – will help schemes consider how and when to invest in such assets. Pension funds consistently tell us that they value hearing what other schemes do, so we have brought together case studies from pension schemes and asset managers to provide practical insights and tips for trustees who want to find out more.”

Roberto Cagnati, Managing Director, Co-Head Portfolio Management, Partners Group, said:

“For too long defined contribution pension schemes have been unable to access longer-term investments such as private markets, which defined benefit pension scheme beneficiaries have benefited from for decades.

“Partners Group welcomes the government's intention to reduce barriers to investing in illiquid assets, which should allow defined contribution schemes the opportunity to gain exposure to these long-term asset classes and reap improved risk and return and diversification benefits. We are also delighted to have contributed to the PLSA's guidance on this issue, which we think will be a useful addition to the scheme investment toolkit.”

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