Let British pension funds back tech scale-ups, urges Legal & General boss Nigel Wilson

Nigel Wilson told the Standard: “If we’re not careful, [investment] will just come from America, from people’s 401Ks [the American savings product]. We would rather it come from UK pensions.”

L&G already invests in startups but can find it more difficult to invest in bigger businesses that are growing fast but still private.

Wilson said money managers needed “greater flexibility” to invest in growth businesses and called on the Chancellor to “nudge” existing rules at the upcoming Spring Statement to make it easier. Legal & General manages £1.4 trillion of cash, much of it pension savings.

Wilson said conversations with the Treasury so far had been encouraging. Chancellor Rishi Sunak and Prime Minister Boris Johnson last year urged City money managers to drive an investment “big bang” to help power the Covid-19 recovery. The government is eyeing reform of European Solvency II rules, which would help to unlock investment.

Wilson’s comments came as L&G announced profits above £2 billion for the first time in its 186-year history. Profits at its insurance arm jumped 42% while profits rose 68% at L&G Capital, its investment arm that backs “alternative” assets such as real estate, clean energy and credit. Capital benefited from a bounce back in the housing market and strong returns from venture capital investments.

2020 was a “pause year” for the business, Wilson said, and it “caught up” last year.

The FTSE 100 group hiked its dividend by 5% to 18.45p. The stock rose 12.2p to 257.3p.

Analysts at UBS said the results were “in line” but said new business was below expectations.

Russian assets make up just 0.1% of L&G’s portfolio and the company has already committed to selling them as soon as the market allows.