He added: “It’s worth noting that at the same time the FCA is telling asset managers to manage liquidity risk, the regulator is also in the process of opening up long term asset funds investing in highly illiquid assets to retail investors. The initial impetus for long term asset funds came from none other than Rishi Sunak, in his former role as chancellor.
"The not-so-subtle goal is to tap up the large amount of money sat in pension funds for investment in UK infrastructure and start-ups, to help boost economic growth and fund the transition to greener energy. The government is also reportedly considering requiring pension funds to invest a certain proportion of their money in the UK, including into some illiquid assets.
"We will perhaps find out more when Jeremy Hunt gives his Mansion House speech next week. The government does seem to be focused on getting that pension money flowing into UK start-ups and infrastructure, despite the illiquid nature of these assets."
sally.hickey@ft.com
