Baroness Sharon Bowles, Member of the House of Lords, talked with Proactive's Stephen Gunnion about mounting concerns surrounding the Pension Schemes Bill and its proposed exclusion of listed investment companies from qualifying assets for DC default pension schemes.
Bowles explained that the issue is not about existing rules, but a clause currently progressing through Parliament that would require certain pension schemes to invest in private assets only through non-listed vehicles. She warned that this approach ignores how markets operate in practice and risks distorting investment behaviour.
The exclusion could affect investment in infrastructure projects such as wind farms, nuclear facilities like Sizewell, hospitals and schools. Bowles highlighted that listed investment companies have historically provided access to such assets while allowing liquidity for investors. As she put it, “It’s a route that is very important because retail investors can also get a slice of the action.”
Addressing concerns about risk, Bowles argued that underlying asset risk exists regardless of structure, stating, “I wouldn’t say that one is more risky than the other. You’ve got different risks, and that’s why they’re actually rather complementary.”
She also warned that excluding listed investment companies could remove potential cornerstone investors from IPOs and follow-on fundraisings, potentially damaging broader UK capital markets. Bowles criticised the lack of consultation and described the policy approach as “a slogan” rather than a reflection of market realities.
Watch the full interview for detailed insight into the debate surrounding the Pension Schemes Bill and its potential market impact.
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