(Bloomberg) — The new Labour government under Prime Minister Keir Starmer is looking to firm up a structure for the UK’s National Wealth Fund in time for an investment summit planned for the autumn, in a bid to showcase the initiative to an international audience.
Most Read from Bloomberg
- Biden’s Putin-Zelenskiy Gaffe Deals Fresh Blow to Campaign
- Tesla Delays Robotaxi Event in Blow to Musk’s Autonomy Drive
- Stock Rotation Hits Megacaps on Bets Fed Will Cut: Markets Wrap
- Saudis Warned G-7 Over Russia Seizures With Debt Sale Threat
- Saudi Prince’s Trillion-Dollar Makeover Faces Funding Cutbacks
Questions to be resolved include the fund’s leadership and whether there will be a reorganization of the UK’s multiple publicly-owned financing bodies. The government has committed £7.3 billion ($9.7 billion) to the fund and wants to raise three times as much from the private sector as part of efforts to turbo-charge the $3.3 trillion local economy.
To help get the initiative up and running as soon as possible, Rhian-Mari Thomas, chief executive officer of the Green Finance Institute and chair of the taskforce of financiers that authored the report for the fund’s blueprint, said some decisions have been made for “speed to market.”
It is now for Chancellor of the Exchequer Rachel Reeves and Treasury officials to make the final decisions in a review expected to be completed by the investment summit, Thomas said.
In remarks alongside the report’s publication on July 9, Reeves said the fund was being created in “less than a week” after the election and that there was “no time to waste.”
Fund Structure
One big issue will be whether the wealth fund will sit above or alongside other government-owned bodies, or if there is a wide-ranging shake up to consolidate the entities.
Initially, the government-owned UK Infrastructure Bank, set up in 2021 and run by former HSBC chief executive John Flint, will allocate money from the wealth fund, the Treasury said. Flint said he was “delighted” that the bank was being given extra funds to invest.
There will also be a role for the British Business Bank, which focuses on smaller enterprises. Its chief executive, Louis Taylor, said he hoped the fund would “create a single coherent governmental offer for businesses and a compelling proposition for investors.”
Streamlining the publicly owned agencies — which include the Scottish National Investment Bank, the Development Bank of Wales and the Advanced Research & Invention Agency — would increase the chance of success, according to Thomas.
“There’s genuine friction cost to organizations trying to navigate a fragmented landscape,” she said. Private investors have been frustrated in the past by approaching one body with an idea to be told “that’s not my mandate,” she added.
