Back British: Tech boss calls on UK pension funds to invest at home
The boss of a national start-up group has called on pension funds to back British tech businesses and “take more of an interest in the next generation of UK companies”.
Gerard Grech, CEO of TechNation, which works with smaller tech firms to boost growth, said that the UK was a global leader in technology but institutional investors and pension funds had so far failed to throw their weight behind the sector.
In an interview with City PM, Mr Grech said: “I would just like to see more pension funds getting behind our own domestic talent and pioneers.
“I see more and more international capital coming into this country, which is great.
“But going forward wouldn’t it be great if we saw more local pension funds actually back and take more of an interest in the next generation of UK-based companies and be part of the success.”
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Mr Grech said that while the tide had begun to change, pension managers were still yet to fully realise the opportunity that the UK’s smaller firms present.
Pension funds have historically been restricted by red tape which prevents them from making often riskier investments in venture capital and start-up businesses.
But Mr Grech’s comments come after the Government floated plans last year to loosen the pension charge cap of 0.75% so that pension managers could invest in funds managed by private equity and venture capital firms.
Ministers say that lifting the cap would allow pension funds to deliver better long term returns for investors as well as back innovative smaller businesses tackling issues like climate change.
Guy Opperman, pensions minister, told the Financial Times in November: “Such investments have the potential to provide better returns for members as part of a balanced portfolio and help to sustain employment, our communities and the environment.”
The proposed plans to loosen the cap are currently under consultation and set to close on January 18.