A long-term financial and professional services strategy targeting sovereign wealth funds and overseas public pension funds could bring £7.7 billion ($10.1 billion) in additional capital into the U.K. by 2030, a new report said.
The report, published by the City of London Corp. on Sept. 19, showed that sovereign wealth and public pension funds that opened U.K. offices have increased their investment in their first five years by a factor of 2.2. That’s brought in an additional £13.4 billion in investment into areas including infrastructure, innovative tech and renewable energy, a report of the research said. That capital has been invested across 36 cities and towns outside of London.
"The U.K.’s financial and professional services are the engine in the country’s economy,” said Chris Hayward, policy chair of the City of London Corp., in a news release. “It is therefore essential that the UK positions itself as the premier destination for overseas investors.
The City of London Corp. wants the new Labour government to establish a long-term financial and professional services strategy, which would be overseen by a public-private sector financial and professional services council and chaired by the chancellor of the exchequer, the report said.
That strategy should put financial and professional services at the heart the U.K.’s inward investment and streamlines the way foreign investors can invest in the country.
The City of London Corp. wants the U.K. to create an “inward investment agency” to implement the strategy, adding that piloting a dedicated financial and professional services investment hub “is a first step towards creating a standalone, cross-sector National Investment Agency,” the report said.
The report cited moves by British Columbia Investment Management Corp., Victoria, which increased its U.K. investments by £4.7 billion after opening an office in 2016; and Aware Super, Sydney, which since opening its office in the U.K. last year has committed £8 billion to the U.K. by 2030. BCI had C$229.5 billion ($169.4 billion) in assets as of March 31, and Aware Super had has A$170 billion ($114 billion) in assets.
The £7.7bn of additional capital from foreign sovereign investors setting up offices in the U.K. will serve alongside the government’s National Wealth Fund as a crucial vehicle to drive growth not only in London but in every corner of the UK, particularly cities such as Cambridge, Sheffield, Leeds and Manchester which are at the cutting edge of biotech, fintech and life sciences – key growth industries across the globe.”
