The London Fund Launches During Brexit Finalization

Posted on 02/01/2020

There is a new institutional investor in the city of London, appropriately named The London Fund. It is the brainchild of three pension groups based there: Local Pensions Partnership, London Collective Investment Vehicle, and London Pensions Fund Authority. Combined, they have £57 billion under management. The London Fund will focus its efforts on housing and infrastructure investment in the area. Hundreds of millions of pounds are being readied for deployment in mid to late 2020. Of interest to the pensions are: rental and affordable housing, community projects, digital infrastructure, and clean energy. All investments will be screened for their potential to deliver long-term revenue for members while enhancing the quality of life for those who live locally. The closed-end fund will be managed by Local Pensions Partnership and London Collective Investment Vehicle.

The financial sector in London is waiting to see how Brexit will impact business. A blow to the city would be felt nationwide. The industry delivered £39.7 billion to the government in taxes in 2019. Member states of the European Union would like to see more business relocate, but it is not easy to replace the financial systems in place that London is known for. There will likely be little change until 2021, and negotiations will determine the extent of London’s new level of involvement in EU business affairs. Speculation is running rampant, but there is no certainly yet. The EU is hoping to discourage members from defecting. However, the risk of alienating the U.K. and causing it to lure capital to its shores through unmatchable incentives poses a threat to the supranational organization.

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