UK - Schemes are being urged to put more money into smaller quoted companies for the "good of entrepreneurial Britain".
The National Association of Pension Funds is producing a guide outlining the benefits of choosing domestic options ahead of international investment banks.
The guide – which has been put together in partnership with Quoted Companies Alliance, the lobby group which represents companies outside the FTSE350 – will be launched this autumn.
Research by the QCA shows a sustained downward trend in the number of pension funds and investment trusts putting money into small companies, leading to fears of damage to an important part of the economy.
It pointed out that £7bn was invested in smaller quoted companies in 1996 and if interest had remained at that level, institutional investment would have been £5bn higher than the £12.3bn put into small stocks at the end of 2001.
While the NAPF is not allowed to give advice on investments, its guide provides information on the variety of investment strategies and types of investment on offer.
QCA director John Pierce said: “This is something people should be concerned about with the big employers of the next five to 10 years being developed now.
“Unless there is increased investment, growth will not be as sustained or as solid as it could be and this is something the government needs to be, and is, taking seriously.”
Pierce blamed the shift on the consolidation of companies leading to larger sums of money being invested in one go, rather than in smaller chunks.
This week's edition of Professional Pensions is out now.
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