M&S chair blames pension funds for decline of London’s stock market

M&S chair Archie Norman has blamed the decline of London’s stock market on a fall in UK pension fund investments in British companies and the decrease in corporate share options.

Speaking to the Financial Times, Norman said that it was “undeniable” that the decline in UK pensions investing in equities “has substantially reduced the depth” of available funds for domestic stocks, impacting London’s stock market.

“Most large corporate pension funds are invested for low risk and low return,” he said. “If they had been invested in index-trackers or … private assets, we would probably have wiped out many pension deficits and created a pool of capital available to invest in British institutions.”

Norman – who alongside being the chairman of M&S, sits on the board of private equity firm Bridgepoint – added: “I’m on the board of a private equity firm which is substantially investing in European companies, but our money comes from the large [international] public sector pension and endowment funds.


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“They are invested for long-term return, creating a deep pool of capital, a thriving stock market, and the growth of private companies — but this is not happening in the UK.”

It is not the first time the M&S chairman has spoken out about his concerns of the UK economy. In March, Norman  slammed the Bank of England interest rate hikes as “totally ineffective”, claiming they did not “do very much [to] cool price increases”.

However, Norman’s pension comments come as the upmarket grocer faces its own dilemma. In April, it was reported that the M&S pension scheme was at risk of “huge potential losses” after investing money into a Home REIT sister fund that is now under investigation by the Financial Conduct Authority.

It was understood a drop in value of HLIF’s portfolio would create significant losses that impact its investors, which include M&S.

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1 Comment. Leave new

  • Nothing wrong since is pension , can imagjne showing a loss to the pensioners? But is there any profit after taxed? This does matter, usually proportionate the risk no?

    Reply

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