Why UK schemes lose out to nimble overseas competitors on infrastructure

Infrastructure has been a hot topic among UK schemes over the past couple of years. With its long-term matching characteristics, it seems like a perfect fit for schemes looking to match liabilities, but inflows have been muted.

UK schemes have created “a lot of talk, not much action”, as Anthony Fasso, chief executive at asset manager AMP Capital told me this week.

So has little changed? Last year, John MacDonald, head of manager research at Hymans Robertson, said: “There is probably a lot of pent-up demand for infrastructure, which will be realised once the [Pensions Infrastructure Platform] is finalised.”

The Pip was finalised and launched at the beginning of this year, but with a less-than-stellar reception as two of its founding members retreated from the fund due to its risk profile.

One factor Fasso did point to was the competition UK schemes are facing from their international counterparts. He added that while UK trustee boards are still getting their heads around infrastructure as an asset class, UK infrastructure was “being snapped up by other pension schemes”.

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