| LGPS are star attraction The world’s richest man, Elon Musk will not be among the 300 business leaders invited to the UK government’s international investment summit on 14 October.
After a series of what the government calls "totally unjustifiable" and "pretty deplorable" social media tweets on his platform X following civil unrest in the country this summer, Musk has been backlisted.
Given that Musk is the owner of Tesla, the largest electric vehicle company in the world with a market capitalisation of USD805 billion and is a strong proponent of advancing artificial intelligence, you might think he would be a prime candidate for a summit designed to show the UK is "open for business".
Yet, according to the BBC, Musk’s tendency to spread false information and his attacks on Prime Minister Kier Starmer appear to outweigh his financial clout.
Among those more welcome at the event, will be the
UK’s Local Government Pension Schemes (LGPS) who, according to research from XPS Group, are ploughing billions of pounds into domestic projects designed to support local growth and support the country's Net Zero ambitions.
The consultancy reports that nearly half (49 per cent) of LGPS funds have established Net Zero targets and, in efforts to achieve those, almost three-quarters (74 per cent) have switched their investments into strategies with a sustainable objective.
Meanwhile more than a quarter (26 per cent) of local authority funds had committed to sustainable projects including renewable energy.
With assets projected to grow to GBP500 billion by 2030, the LGPS is a star attraction in the government’s growth ambitions, as are the asset managers that support them.
In announcing the Summit in August, the government signposted Future Growth Capital (FGC), the private markets investment manager launched by Phoenix Group and Schroders
this July to support the Mansion House Compact.
FGC will aim to deploy a significant allocation of up to GBP2.5 billion over three years from Phoenix Group, and allocate GBP10-20 billion of investor funds into private markets over the next decade.
Alongside the LGPS these are important institutional investment partners that will make a notable difference to the UK, but – Musk aside - the government may need to tread carefully if it is to avoid alienating business owners on political grounds.
Keeping with investment in private markets, this week we bring you a thought piece from Silke Bernard, Global Head of Investment Funds, Linklaters, who writes that the revamped European Long-Term Investment Funds (ELTIFs) "appear finally to be on the point of a breakthrough".
ELTIF 2.0 is designed to redress some of the limitations of the original design and encourage investment in critical infrastructure, the transition to sustainable energy and
decarbonisation of the economy, and unlisted small and medium-sized companies that need new sources of capital.
Bernard says 34 ELTIFs have been launched since January 10, 2024, when the reformed legislation took effect, and forecasts for the growth of the ELTIF range from EUR35 billion by the end of 2026, according to German rating and analytics firm Scope, "to a more speculative" European Parliament report suggesting that ELTIF assets might reach EUR100 billion by 2028.
This is still a drop in the ocean compared to the European private equity market which was valued at USD397.2 billion in 2023, but ELTIF 2.0 looks set to be an exciting proposition.
Here’s your weekly reminder to nominate your favourite service provider in the Institutional Asset Manager awards for 2024. Follow this link to place your votes.
We are also pleased to bring you a discount for a
London-based responsible investment conference. This code, ETF20, will gain you a 20 per cent discount on tickets to attend RAO Global’s symposium on 21st November in London.
Gill Wadsworth, Editor, Institutional Asset Manager
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