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Key takeaways from the episode:
- The UK currently provides more political stability than other countries making it a safer investment, although it is lagging behind peers in terms of domestic investment
- AIM offers strong growth potential with attractive valuations and can be found across the UK making it a good option for place-based investing, encouraging the development of local economies
- Investing in the UK provides an opportunity to rebalance portfolios with heavy US allocations
Judith MacKenzie joined Laasya Shekaran and David Brown from Pensions for Purpose to talk about investing in the UK, and particularly in smaller companies listed on the Alternative Investment Market (AIM).
Judith's main message is:
“The UK, AIM in particular, really needs to be part of an asset allocators thoughts at the moment. It’s cheaper than it’s ever been in my lifetime. It provides excellent diversification in terms of investment, and it’s right in our back door - there are great companies that deserve our investment.”
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Timestamps
01:10 – Sets the scene on AIM and why initiatives like the Mansion House Compact have been urging pension funds to invest here
“It’s cheaper, it’s a growth market, and it outperforms over the long-term.”
03:46 – Highlights the pros of investing in the UK, such as the minimal impact of tariffs on the market and greater M&A activity
05:03 – One of the issues with AIM is that it is the number of companies within it is falling
06:53 – Highlights the benefit of investing in AIM – a true supporter of local economies
08:52 – Explores how UK investment works with sustainability and impact goals
“If you do a little bit of digging, you can find some really great climate-focused companies”.
11:14 – How to encourage the companies in AIM to consider and engage with climate change initiatives
14:16 – The topic of mandation for pension schemes is discussed. Judith believes education on these markets is more important than mandating investment into them
17:23 – Explains how a place-based strategy could work when investing in AIM and the UK as companies can be found across the UK, not just in London
20:48 – Laasya and Judith discuss investing in listed versus unlisted markets, especially the benefits of investing in listed markets like AIM
“I think the benefit of the AIM market it that, as you say, you’ve got the liquidity, you’ve got the visibility, you’ve got the governance”.
23:50 – the political landscape is explored, particularly how the UK markets compare to those of its peers, such as the US, Canada and Australia
25:55 – Judith highlights the one main takeaway she wants listeners to take from this podcast
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