XxX | Feature Contents Editorial
DEFINED CONTRIBUTION: A BRAVE NEW WORLD
Defined contribution (DC) is the future of Britain’s pensions industry. The introduc- tion of auto enrolment a decade ago is evidence that political will has been behind it for some time. And so is the commercial world. With the majority of defined benefit (DB) schemes no longer accepting new members, corporate boardrooms are working to push the responsibility of funding retirements onto the employees themselves through offering plans where the size of their pension largely depends on the performance of the markets.
DC assets are on track to eclipse their DB counterparts within the next decade. Master trusts are at the heart of that trend, with most companies signing up to multi-employer schemes. But with the majority invested in equities, how well prepared are they for the coming storm? We look at the asset allocations of the UK’s largest master trusts to find out. Our coverage starts on page 20.
Elsewhere, we look at one of the most important yet under-reported issues in ESG-led investing: water. A lack of freshwater is a threat to economic growth. Companies need it to operate, we cannot grow food without it and conflicts could be sparked by a lack of the mineral, so what do investors need to look at when assessing the issue. Find out on pages 30-33. We also examine how index investing is evolving through the growth of “third way” funds, which are hybrids designed to improve risk management. We look at what inves- tors need know from page 44.
This issue also looks at infrastructure. Pension schemes and insurers like secure investments that pay regular returns for decades. Building roads, hospitals, bridges and digital communication networks offer that.
One of the problems has been getting money into such projects due to high demand. But now the government has an upgrade and repair policy, which needs private capital to fund it, so we look at what hurdles investors have to jump over to bring infrastruc- ture into their portfolios (pages 48-53). Finally, we speak to Jason Fletcher, the head of investment at the UK’s largest local gov- ernment pensions pool, London CIV. He tells us how he keeps 32 schemes happy and why funds are like strawberries. You can read his thoughts from page 12. We hope you enjoy the issue.
Mark Dunne Editor
m.dunne@portfolio-institutional.co.uk
Issue 111 | March 2022 | portfolio institutional | 3
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