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2026-01-30 14:54:02
[Private Equity Boom Hits the City of London: Nearly Half of Pension Funds Shift from Public to Private] 1. UK fixed-income pension plans are allocating nearly half of their equity investments to unlisted companies, a trend that poses a significant challenge to the recovery of London's public markets. According to a report by the Pension Protection Fund (PPP), the proportion of such private equity investments has jumped dramatically from less than 18% in 2020 to approximately 45% last year. 2. This rapid shift is raising concerns among regulators and market participants. Julia Hoggett, CEO of the London Stock Exchange, pointed out that the booming private market may pose a greater threat to the LSE than other exchanges, as it diverts funds and liquidity from the public markets. Because the private market typically has lower transparency and liquidity, it can amplify risks when market conditions change. 3. Currently, UK regulators have launched an investigation into this, focusing on the potential reactions of institutional investors, including pension funds, under the pressure of economic recession, and the potential threat this could pose to national financial stability. It is estimated that the assets of fixed-income plans covered by the PPP exceed £1 trillion. The fund itself acts as a backing, responsible for providing compensation to affected employees when corporate bankruptcies lead to funding gaps in pension plans.
