UK Pension Schemes are turning away from private equity as they need a more reliable investment to ensure a solid income.
The shift in private equity, the allocation of funds has fallen from 2.5% to just 1%. Although the adjustment doesn’t seem like it will have much impact, it is likely to have longer term issues.
The UK pensions industry is in trouble and with so many well known companies at a deficit with their pension funds, it is no wonder that they are looking to stronger investments for pensions. Pension trustees are looking to maintain a high level of fixed interest assets in order to accurately predict income.
Pension funds are therefore reducing their potential investment returns on an annual basis in order to secure income.