he boss of savings and investment giant Legal & General wants the government to overhaul investment rules to make it easier for UK pension funds to back fast-growing tech companies.
Nigel Wilson told Standard: “If we’re not careful, [investment] will just come from America, from the 401K people [the American savings product]. We would prefer it to come from UK pensions.
L&G already invests in startups but may find it harder to invest in larger companies that grow quickly but remain private.
Wilson said fund managers needed “greater flexibility” to invest in growing businesses and called on the chancellor to “push” existing rules in the next spring statement to make things easier. Legal & General manages £1.4 trillion of cash, much of it in retirement savings.
Wilson said conversations with Treasury so far have been encouraging. Last year, Chancellor Rishi Sunak and Prime Minister Boris Johnson urged city fund managers to generate a “big bang” of investment to help fuel the Covid-19 recovery. The government is considering a reform of the European Solvency II rules, which would help unlock investment.
Wilson’s comments came as L&G reported profits above £2billion for the first time in its 186-year history. Profits at its insurance arm jumped 42% while profits rose 68% at L&G Capital, its investment arm that backs “alternative” assets such as real estate, clean energy and credit. Capital benefited from a rebound in the housing market and strong returns from venture capital investments.
2020 was a “pause year” for the company, Wilson said, and it “caught up” to last year.
The FTSE 100 group raised its dividend by 5% to 18.45p. The stock rose 12.2p to 257.3p.
UBS analysts said the results were “in line” but said new business fell short of expectations.
Russian assets represent only 0.1% of L&G’s portfolio and the company has already committed to selling them as soon as the market allows.