Aberdeen Investments has joined a growing chorus of calls for investment trusts to be included in the Pension Schemes Bill.
Christian Pittard, head of closed-end funds at Aberdeen Investments, has backed other industry voices calling for investment trusts to be added to the bill.
Many leading bodies and figures want investment trusts to be specifically mentioned, including the Investment Association, the Association of Investment Companies and Baronesses Bowles and Altmann.
All want to see a 'product-neutral' approach to investing under the Pension Schemes Bill.
In January a bid to include investment trusts in the Pension Schemes Bill was met with resistance in the House of Lords debate on the Pension Schemes Bill. The Pension Schemes Bill is being debated in the House of Lords, discussing recent proposed amendments.
Amendment 46A from Baroness Lady Bowles of Berkhamsted, supported by Baroness Ros Altmann, proposed that investment trusts and REIT’s be included as eligible wrappers for meeting the thresholds for 'qualifying assets' under the Mansion House Accord.
Those against the amendment countered that investment trusts were, "just buying and selling a financial asset" and do "nothing to put money into the UK economy."
Qualifying assets refers to assets that can be considered under Government plans to mandate pension funds to invest in certain types of investment, or being forced to invest in the UK, under new powers under consideration in the Pension Schemes Bill.
Under the proposed rules, Long-Term Asset Funds (LTAF - a semi-liquid product that has been developed to hold ‘qualifying assets’) can be used by pension schemes to gain access to illiquid assets.
Any investment trusts or REITs would not count for the purpose of ‘qualifying assets’ if the Government uses reserve powers to mandate pensions to invest in certain types of investment or places such as the UK.
Investment manager Aberdeen says the exclusion of investment trusts and REITs is anti-competitive.
Christian Pittard, head of closed-end funds at Aberdeen Investments, said: “It is so important that the industry speaks with one voice on this issue. Excluding investment trusts from the Pension Schemes Bill is also contrary to the Productive Finance Working Group’s agreed position that investment trusts and LTAFs should operate as parallel routes to long-term illiquid assets.
“Investment trusts are proven vehicles for channeling long-term capital into productive assets. They invest in infrastructure, housing, digital connectivity, clean energy and the logistics backbone that underpins the UK economy.
“Investment trusts are particularly well-suited to holding illiquid assets as they can address both permanent capital allocation and a secondary market for daily liquidity. But what this debate ultimately signals that, as an industry, we have more to do to broaden the understanding of the real economy impact of these important vehicles.”
There has been widespread concern about the suggested provisions allowing Government to mandate pension scheme investments to invest in the UK.
The Pensions Management Institute (PMI) and the Society of Pension Professionals (SPP) said they believed that such powers represent a fundamental shift in the UK pensions framework.