The investment funds of life insurance and pension companies have had an outsized and scarcely remarked impact on the built environment in cities and towns across the world. In the UK’s financial and investment circles life and pension funds have traditionally been referred to simply as ‘the institutions’ in reference to the sheer scale of the collective funds at their disposal. The financial arrangements struck between the institutions, property companies, multiple retailers, local authorities and national governments gave twentieth century high street, town, and shopping centres much of their characteristic features and are currently at play in the reimagining of town centres, internet infrastructures and housing particularly through the ‘Edinburgh Reforms.’ The ‘Edinburgh Reforms’, initially pitched as Big Bang 2, include a commitment to loosen the capital requirements for insurers allowing them to invest in the kind of infrastructure and ‘alternative assets’ identified as vital to the Conservative administration’s ‘levelling up’ agenda (HM Treasury, 2022). Insurers, including such early adopters of urban development as Aviva and Legal and General, have cautiously expressed their commitment, in the right regulatory environment, to investing in levelling up projects that can drive regional growth, tackle the housing crisis, build hospitals and schools, and facilitate green energy transition.
Insurance and pension funds are already major investors in the logistic networks and warehouses that fuel the digital economy. Magna Park, for example has been owned and part-owned by a series of asset management companies over the last decade. Among these, abrdn, an offshoot from the former Standard Life Assurance, holds a substantial stake across several Real Estate Investment Trusts (REITs) and Pooled Property Pension Funds. The vast but inconspicuous network of warehouses hosting logistics, distribution and data centres is the infrastructural foundation of internet retail, as Dan Greene recently pointed out ‘at the core of the new economy is one of the oldest: real estate’. At the base of the economic and social interests that comprise the internet then, is not big tech, but landlords in the form of labyrinthine networks of institutional investors, private capital and asset managers.
People: Liz McFall
