UK Pension Providers Team Up in Push for Infra, AI Investments

(Bloomberg) — Some of the U.K.’s largest pension providers and insurers have formed a group that aims to pour more money into the nation’s infrastructure and fast-growing businesses in sectors such as artificial intelligence and fintech.

The UK Treasury said on Monday that the “£20” group would work with the UK Investment Office to identify regional investment opportunities. The announcement comes ahead of the government’s regional investment summit in Birmingham on Tuesday.

Legal & General Group Plc, Britain’s largest asset manager, and government-backed pension fund Nest have already committed billions of dollars to build more affordable housing and improve broadband connections in rural areas, according to the statement.

Chancellor of the Exchequer Rachel Reeves has stepped up pressure on pension funds to support the UK economy after years of outflows from domestic assets. While UK pension funds have doubled their investments in unlisted shares in the past year, they have so far fallen short of the levels needed to meet the government’s pledge to support private businesses, according to figures published by the Association of British Insurers last week.

The government said this year that a “reserve force” would be needed to force pension funds to invest in the local economy; This move was fiercely opposed by investment managers who believed that the choice of where to invest savings was the sole prerogative of their clients.

Pension providers also cited cost concerns and performance fees as obstacles to further increasing investment in private markets.

Sterling 20’s members are:

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