The Pensions and Lifetime Savings Association has published a new guide to investment companies for pension trustees.
This guide sets out the structural features of these closed-end investment vehicles and covers issues to do with liquidity, volatility, diversification, performance, costs, discounts and gearing.
Investment companies, which are listed vehicles, are often used to access less liquid assets, such as property, infrastructure and private equity. The guide, ‘Investment companies made simple’ can be downloaded from the PLSA’s website.
PLSA deputy director, policy Joe Dabrowski says: “Investment companies have unique features that could be advantageous to asset owners looking to diversify their investment portfolios.
“This guide explains the distinctive characteristics of investment companies and answers questions trustees might have about an investment vehicle which can trace its history back more than a century and a half.”
The Association of Investment Companies chief executive Richard Stone adds: “We are pleased to support this guide, which takes a detailed look at the pros and cons of investment companies compared to other fund structures.
“Investment companies offer easy access to alternative and illiquid assets, from private equity to infrastructure, within a listed company structure that can be traded easily on the stock market. They also have significant long-term performance advantages. We hope this guide will encourage more pension trustees to take a look at the sector.”
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