British pension funds agree to invest more in private markets

Two truisms have taken hold in the City of London in recent years. One is that Britain’s stockmarket is drifting into irrelevance, having lost its risk appetite, much of its investor base and hence its allure to capital-hungry businesses. The other is that Britons’ pension savings are invested in the wrong things. In particular, they lack exposure to the sort of risky assets with the growth potential to fund a decent retirement. The two problems suggest a common solution: push pension funds to invest more in early-stage, high-growth firms. Pensioners would get diversified portfolios with juicier returns. Meanwhile, a bevy of young, ambitious firms might—with more domestic investors backing them—be convinced to list in London rather than overseas.