Worldwide, pension funds stood at a high of $15 trillion were under management at end-2003, mostly in a few developed economies, particularly the US, Japan and the UK. Pension funds are also growing in emerging markets with $250m managed at end-2003 on behalf of about 100m people in Latin America and central Europe. Or so estimates a new report from International Financial Services (IFSL), a London-based industry organisation that aims to promote the UK-based financial services industry.
IFSL says the UK’s international orientation is indicated by nearly a third of UK pension fund portfolios being invested in foreign securities and by the £320bn of pension assets managed in London on behalf of foreign clients. “The experience of London’s asset managers, insurers, lawyers, actuaries and other advisers ranges far beyond the UK, with many having provided advice on restructuring of state pension systems and establishment of privately managed funded pension systems,” says IFSL.
IFSL’s Pension Group has identified China, India, Romania and Russia as particular target markets for development of pensions. IFSL members recently accompanied the Lord Mayor of the City of London to deliver a seminar in Turkey in February entitled “Long Term Personal Finance in Turkey” which looked at the UK experience of developing and regulating a private pensions and mortgage market.
After a number of years during which its pensions and insurance markets were regulated by the same body, India has just appointed its first pensions regulator, Mrs Vineeta Rai. She has expressed an interest in visiting the UK and if this goes ahead IFSL will be involved in devising her programme.