A fresh £8 billion investment from Australia’s biggest pension
fund, AustralianSuper, will take its total investment in the UK
to over £18 billion by the end of the decade.
It comes after Chancellor met with CEO Paul Schroder,
alongside some of the Board, this afternoon and rounds off a day
of significant investment announcements, including the government
announcing over £360 million of funding for advanced
manufacturing.
The Prime Minister attended the ground-breaking of a development
site in Swindon today owned by Panattoni, Europe’s largest
developer of new build industrial and logistics facilities, which
has the potential to create 7,000 jobs for local people and add
£1.2 billion to the economy, and the Chancellor visited Siemens
Mobility, which revealed a £100 million investment for a
manufacturing and research and development centre in
Chippenham.
Growing the economy is one of the Prime Minister’s priorities,
and is part of the plan to improve economic security and
opportunity for everyone. The UK has secured investment from
major corporations over the past year, and according to PWC,
around 4,000 CEOs see the UK as a top-three priority country for
investment, alongside the US and China.
It also follows the announcement of a series of pension fund
reforms to back British business and increase returns and
transparency for savers, including a new Value for Money
(VFM) framework aimed at
improving the performance of defined contribution pensions – a
market growing rapidly, fuelled by the success of Automatic
Enrolment in increasing pension savings by over £26 billion
between 2012 and 2022.
Prime Minister said:
The raft of investment announcements we have seen today show that
the UK remains one of the most attractive places to invest in the
world.
But because of the difficult, long term decisions the government
has taken the economy is now turning a corner, and we must stick
to the plan – driving investment and growth to deliver long-term
change and a brighter future everyone.
Chancellor said:
This major investment from AustralianSuper will promote growth
and strengthen the UK’s position as a leading financial centre,
creating wealth and helping to fund public services.
Britain continues to be Europe’s leading hub for investment, and
it is through commitments like this that we will funnel billions
into our brightest, burgeoning businesses to scale up and
grow.
The Australian pension fund industry is the fastest growing in
the developed world with assets under management doubling every
five years, and the Chancellor has previously referred to the
success of the pensions model in Australia, which has pioneered a
similar set of reforms to VFM.
AustralianSuper has had a presence in the UK since 2016, with
approximately £8 billion currently invested in the UK and holding
over £2.5 billion in UK listed equities. It is on track to deploy
more than £8 billion of new capital by 2030 into large-scale,
long-term investment opportunities in some of the fastest growing
sectors in which Britain excels in comparison to its European
peers, such as the energy transition and digital
infrastructure.
Mr Schroder has praised the UK’s investment opportunities for
enabling high-quality, long-term returns for members. In future
the company stated it expects £7 of every new £10 invested to be
deployed outside Australia, as it pursues the best global
investment opportunities and long-term returns for
members.
The United Kingdom has the largest pension market in Europe,
worth over £2.5 trillion. Last year the Chancellor set out his
‘Mansion House Reforms’ to capitalise upon this, with the
possibility to unlock an additional £75 billion for high growth
businesses - supporting the Prime Minister’s priority of growing
the economy and delivering tangible benefits to pensions savers.
These include the ‘Mansion House compact’ which encourages
pension funds to invest at least 5% of their assets in unlisted
equity, which is in line with the Australian model.
Minister for Investment Lord Johnston said:
Foreign investment is not just about numbers on a spreadsheet. It
creates jobs, nurtures skills and unleashes our nation’s
innovative spirit. That’s why the UK’s recent trade deal with
Australia prioritised boosting investment flows.
AustralianSuper’s ongoing commitment shows the strong
relationship we have built as they create a global centre of
excellence in London. We are a top choice for major investments
like this, and the government is committed to promoting the
opportunities available to global investors so they choose the
UK.
The UK-Australia free trade agreement, which came into force on
31 May 2023, includes comprehensive provisions on investment,
which has made the UK a more attractive place to do
business.
Notes to Editors
More information on the Value for Money framework
and other pension fund reforms announced by the
Chancellor this past weekend.
