Magazine article Public Finance

Pension Funds 'Should Invest in Infrastructure'

Magazine article Public Finance

Pension Funds 'Should Invest in Infrastructure'

Article excerpt

More must be done to encourage pension funds to back large-scale national infrastructure projects, the chief executive of Partnerships UK has said.

Speaking at die agency's annual conference in London on October 15, James Stewart said that a new financial instrument tor pension funds should be invented to pay for transport, communications, waste and energy projects.

'We're going to need to make a massive investment in strategic infrastructure.' he told delegates,

'That's vital to ensure the UK remains competitive on a worldwide scale and to ensure the economy grows.'

Only centralised schemes could promote an effective switch away from fossil fuels to renewable energy sources, he said. 'If we are to finance this, the pension fluids are going to have to play a very large part. They are die natural long-term lenders to this sector.'

He recommended developing a subordinated debt market to encourage investment from private sector pension funds.

Doug Segars, project director at Partnerships UK, told Public Finance that such a mechanism could encourage public sector funds to help finance strategic infrastructure projects.

Stewart also described how the Private Finance Initiative had remained popular for locally delivered projects such as school and hospital rebuilds since last year's financial crisis. …

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