Six Investment Management Association members, including insurers Standard Life and Prudential are set to invest around £9bn in UK private placements and other direct lending to UK companies over the coming five years.
The announcement from the trade body comes on the back of the yesterday’s Autumn Statement where the Chancellor of the Exchequer announced a new exemption from withholding tax for interest on private placements.
Private placements are a form of long-term, non-bank debt financing, where essentially shares in projects are sold via a private as opposed to public offering.
Commenting on the news, Chancellor George Osborne, said: “This is great news. Our long-term economic plan is all about attracting investment to the UK, getting credit to businesses and helping them grow. Today, all three get a boost. This also signals the potential beginnings of an enduring private placement market for the first time in the UK.”
IMA chief executive Daniel Godfrey added: “This measure, announced yesterday in the Autumn Statement, is a significant boost to the development of the UK private placement market – unlocking crucial capital for UK businesses.”
The four other IMA members committed to make investments include Allianz Global Investors, Friends Life, Legal & General and Aviva. Aviva said today that following the £500m it allocated to infrastructure last year, it now intending to invest another £500m in UK projects and that it was already evaluating a number of potential investment opportunities.