Blow to Reeves as Lloyds’ Pension Arm Slashes Investment in UK – Guido Fawkes

Blow to Reeves as Lloyds’ Pension Arm Slashes Investment in UK

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Scottish Widows has delivered a brutal snub to Rachel Reeves’ plan to encourage pensions funds to invest more in British stocks. The  pensions giant – part of Lloyds Banking Group – which manages £72 billion of workplace pension assets in its default funds, is planning to cut the allocation to UK equities in its highest growth portfolio from 12% to 3%. They’re not playing ball…

Last month the firm refused to sign up to Reeves’ ‘Mansion House Accord’ demanding funds put 10% investment in private markets by 2030 with a requirement to put half of that in UK market. No surprise considering UK stocks have underperformed for two decades. State-directed investing dressed up as economic patriotism…

Scottish Widows said it was planning a “more globally-diversified approach” with the aim of “enhancing risk-adjusted returns by capturing more growth opportunities in high performing international markets”. Reeves’ plan has been slammed by industry insiders, with Antonia Medlicott, managing director of Investing Insiders warning: “Investment decisions should be made solely on the basis of what will produce the best outcome for the investor. Political pressure – and now a mandate forcing fund managers to make certain choices – should never be the driving force.” Quite…

The Treasury has previously threatened to “reinforce” the so-far voluntary Mansion House strictures pursued by Reeves. Scottish Widows’ early insubordination might stir the hand of ‘involuntary’ investment mandates…