City Of London
UK Pension Funds Flee the Equity Market, Adding to London Woes
- Demand for UK stocks has been cut by £400 billion, report says
- Pension funds have boosted bondholdings to manage liabilities
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UK pension funds have drastically cut their exposure to equities in their home market over the past 25 years, sucking out a whopping £400 billion of demand, according to a new report, adding to a deep valuation discount that is making London increasingly unattractive for listings.
UK pension funds reduced their allocation to stocks from about 73% in 1997 to 27% in 2021, cutting exposure to British equities from 53% to just 6% over the same time period, think tank New Financial said in a report prepared for the Capital Markets Industry Taskforce.