Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the use of listed closed-ended investment companies by pension funds as a means for smaller schemes to invest in illiquid alternative assets such as energy, housing, infrastructure and small businesses.

The Final Report of the Pensions Investment Review sets out a vision for the defined contribution workplace market and the Local Government Pension Scheme with fewer, larger schemes that will use the benefits of scale to invest in productive assets and enhance outcomes for savers, as well as better support the economy as a whole.

Last month, 17 of the largest workplace pension providers signed the Mansion House Accord and voluntarily committed to invest at least 10 per cent of their defined contribution default funds in private markets by 2030, with half of that invested in UK private assets.

Collectively these 17 schemes manage around 90% of active pension savers’ savings. This is expected to unlock £50bn of additional private market investment by 2030. As providers work towards meeting these commitments, they will be investing more in private, illiquid assets.

Additionally, we are introducing minimum standards for Local Government Pension Scheme asset pools, embedding local investment as a priority and strengthening scheme governance to ensure it is fit for the future.