Investment - Articles - Investing in illiquid assets in DC schemes


Sonia Kataora, Partner at Barnett Waddingham, said: “DWP has already been working to encourage the use of more illiquid assets in DC schemes – and making the point that this will support an economic recovery.

 “Removing some of the impediments to investing in illiquid assets in DC schemes is a good thing for DC members, as it will allow access to a wider source of returns, often uncorrelated to traditional return sources.

 “DWP has recently consulted on changes to the charge cap requirements in order to ease difficulties with performance fees, which are commonly used by illiquid funds and which is one obstacle. Today’s announcement shows intent to alleviate any practical concerns around such issues.

 “Some DC schemes do already successfully invest in less liquid assets – for example, by pooling alongside more liquid investments and planning ahead for potential gating issues. And of course property has been used fairly commonly as an investment by DC schemes for many years.

 “DB schemes do not face the same practical impediments to investing in illiquid assets as DC, and very few do actually have an allocation to, for example, infrastructure. So it seems unlikely that making these asset classes more available to DC will suddenly open up the levels of investment needed to boost our post-COVID economic recovery although this is a longer term play on the asset class given the longer investment horizon of DC schemes.”
  

Back to Index


Similar News to this Story

Targeted Support major step towards addressing support gap
Targeted Support is poised to play a pivotal role for potentially millions of non-advised individuals. Non-advised could be supported with at retireme
FCA proposals for millions to navigate their financial lives
Millions more people could get help navigating their financial lives with support on pensions and investments, under proposals announced today by the
Comments on FCA proposals on navigating financial lives
Aviva, Just Group, Standard Life, Scottish Widows and the ABI comment on FCA proposals on navigating financial lives

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.