There are currently 86 local authority pension funds in UK, and the majority are extremely risk averse.
These funds collectively manage around £500BN in assets which are sitting in diversified, low-risk portfolios and doing very little to benefit the UK economy as a whole.
At the moment only 5% of these funds are invested in the UK, with 40% going abroad, which isn't great for economic growth.
Megafunds
Rachel Reeves has proposed merging these 86 smaller local authority pension schemes into eight “megafunds.”
The main immediate advantage to this is that it will improve administrative efficiency: there is a lot less duplication of resources with 8 companies compared to 86, after all.
Part of her plan is that larger funds will look around for larger projects to invest in, some of which will be into UK infrastructure, tying in with Britain's Green growth vision.
The figure mooted by Rachel Reeves for investment is £80 billion which means that she's expecting these new megafunds to invest 4 times as much in the UK as they currently do.
The problem...
All of this sounds great but Reeve's has promised there is going to be no mandate for these funds to invest in the UK economy.
To do so would be a bit draconian in a free-market systems where those funds are effectively managing private money, OK the government is paying a lot into those funds, but they are still people's pensions, to be paid out when they are no longer public sector workers.
And without a mandate, I simply cannot see why megafunds are more likely to invest in the UK than they are now...?
And worse case scenario is that larger funds may actually overlook some smaller investment opportunities in the UK.
Also, if the government gets involved in public sector pension reforms I can imagine BTC investments will be firmly out!