One of the United Kingdom’s biggest insurance companies plans to build five new towns over the next decade, investing about £5 billion (Dh30.6bn).
Legal & General, one of the biggest institutional investors in the UK, has made the commitment saying it is one of the best ways to tackle the country’s growing housing crisis.
The move by the insurer is part of a wider deal made between major insurers and pension funds and the UK government to pump institutional money into infrastructure.
For years, pension funds from Canada, California and Singapore bought UK companies and infrastructure assets but the country’s own pension funds seemed unable or unwilling to invest in home markets.
During the global financial crisis that started in 2008, negotiations between insurers and ministers produced a pledge from six of them, including the Legal &General (L&G), to pump £25bn into infrastructure projects.
Legal & General, which has funds of £433bn under management, has now revealed a few details of its plans to build the five towns.
It is part of its plans to invest widely in the housing sector. It has already bought a Scottish housebuilder and also aims to become a significant private-sector landlord, providing homes for rent, especially for the young and the old.
“If we can bring communities with us an agree planning, we’d like to help build several new towns across the country,” said Nigel Wilson, L&G’s chief executive.
“We’re already developing towns within cities, in partnership with enlightened local authorities and boroughs.”
Mr Wilson says the company is determined to think long-term. “The UK needs innovative housing solutions. Demand far outweighs supply and if we’re going to tackle this problem we should look at what has worked in the past, and see how it can be updated and improved.
“One of the great British problems over the last 20 or 30 years an absence of supply and excessive house prices inflation, which has made it unaffordable to large parts of our communities,” he saiys.
“We don’t want house price inflation. We want steady growth in house prices.
Legal & General has also recently agreed a £60 million multi-stage development in Salford, near Manchester in north-west England, with the council, which will result in about 1,000 new homes being built.
As part of the housing proposals, the insurer will fund new council offices for Salford and pump cash into other prime commercial developments in the area.
L&G has also offered its support to “garden cities” – a type of urban planning that has its roots in ideas generated more than a 100 years ago.
Government ministers have said they want to build at least two garden cities in the highly-populated south-east of England.
The first garden cities, such as Letchworth and Welwyn Garden City in Hertfordshire, were developed before the Second World War in an attempt to combine town and country living and provide homes for working people.
However, any revival is likely to be controversial because the locations suggested for the first towns are in Conservative heartlands, where existing residents will probably resist major new building projects.
Other insurers that have also pledged to invest in UK infrastructure include Prudential, Aviva, Standard Life, Friends Life and Scottish Widows.
At the end of last year, Aviva, the UK’s largest insurer, said it would invest £500m in UK infrastructure.
Aviva already has £5bn invested in UK infrastructure assets, including private finance loans for schools, universities and hospitals, and corporate bonds in utility, airport and rail companies.
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UAE currency: the story behind the money in your pockets
Ponti
Sharlene Teo, Pan Macmillan
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MATCH INFO
Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
KILLING OF QASSEM SULEIMANI
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The Penguin
Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz
Creator: Lauren LeFranc
Rating: 4/5
Did you know?
Brunch has been around, is some form or another, for more than a century. The word was first mentioned in print in an 1895 edition of Hunter’s Weekly, after making the rounds among university students in Britain. The article, entitled Brunch: A Plea, argued the case for a later, more sociable weekend meal. “By eliminating the need to get up early on Sunday, brunch would make life brighter for Saturday night carousers. It would promote human happiness in other ways as well,” the piece read. “It is talk-compelling. It puts you in a good temper, it makes you satisfied with yourself and your fellow beings, it sweeps away the worries and cobwebs of the week.” More than 100 years later, author Guy Beringer’s words still ring true, especially in the UAE, where brunches are often used to mark special, sociable occasions.
New process leads to panic among jobseekers
As a UAE-based travel agent who processes tourist visas from the Philippines, Jennifer Pacia Gado is fielding a lot of calls from concerned travellers just now. And they are all asking the same question.
“My clients are mostly Filipinos, and they [all want to know] about good conduct certificates,” says the 34-year-old Filipina, who has lived in the UAE for five years.
Ms Gado contacted the Philippines Embassy to get more information on the certificate so she can share it with her clients. She says many are worried about the process and associated costs – which could be as high as Dh500 to obtain and attest a good conduct certificate from the Philippines for jobseekers already living in the UAE.
“They are worried about this because when they arrive here without the NBI [National Bureau of Investigation] clearance, it is a hassle because it takes time,” she says.
“They need to go first to the embassy to apply for the application of the NBI clearance. After that they have go to the police station [in the UAE] for the fingerprints. And then they will apply for the special power of attorney so that someone can finish the process in the Philippines. So it is a long process and more expensive if you are doing it from here.”
SPEC%20SHEET%3A%20APPLE%20IPAD%20PRO%20(12.9%22%2C%202022)
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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MATCH INFO
Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)
Where: Wanda Metropolitano
When: Thursday, kick-off 10.45pm
Live: On BeIN Sports HD
