European Cities Compete for Institutional Investor Operational Presence
A significant portion of the world’s largest sovereign funds have offices in London, including the revolution battered Libyan Investment Authority (LIA). Elephantine pension investors such as the Canada Pension Plan Investment Board (CPPIB) and Korea’s National Pension Service also have a presence in London. Institutional investors are naturally attracted to financial centers. Since 1986, the financial services sector experienced deregulation in the U.K., and multiple executive administrations, despite political party changes, have kept the environment relatively attractive for financial capital. Granted, countries and states like Luxembourg and Jersey have advantages of structuring investment vehicles; the U.K. has economic size to its advantage.
The battle of luring the world’s largest institutional investors to a core European city has been brewing for quite some time.
Culturally, the British have an extensive history of being a colonial power, pushing influence in all corners of the globe. This can be true also of the French, Portuguese, Dutch and Spanish, but the British were able to influence regions from where sovereign funds have sprouted like Brunei, Kuwait, United Arab Emirates, China, United States, Ireland and so on. Former territories and colonies have had long-term relationships with the British government and financial institutions – forging decades of economic cooperation and levels of trust.
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