The Lord Mayor of the City of London, Nicholas Lyons, has stated that London has the expertise required by Gulf states as they seek to diversify their economies and meet their net-zero commitments in the build-up to COP28 in the UAE. Lyons is currently visiting the region to expand investment into the UK and assess ways in which the City of London can put the country’s pension assets to work in countries such as Saudi Arabia and the UAE.
Lyons expects that his trip will focus on discussions about fintech, green and sustainable finance, and pension systems. He noted that the UK has some £4 trillion ($4.8 trillion) worth of pension assets, and the Gulf offers opportunities for this money to be deployed more actively, meaning the investment opportunities are not all one way. Lyons criticized the UK’s management of its pension savings, describing the country as “very much underinvested,” with only 7% of the pot in productive assets compared to an average of 19% for the next seven largest pension pots in the world.
“This money needs to be deployed more actively in productive assets (because) we have the second-largest pension pot in the world, and when you look at places likes Australia and Canada, they’re putting 25-30 percent to work,” he said.
“We’re very much underinvested in this area. I’d say we’re significantly underinvested and missing a chance, and the fact that Saudi Arabia and the UAE are here (already investing in the UK) is strong corroboration of the opportunities that are there for us.”
Saudi Arabia and the other Gulf states have been working to diversify their economies away from hydrocarbons. Lyons said that the Gulf states are looking at financial services as a potential avenue for growth, and there is real expertise in London on this front that they’re looking to access and discuss. He believes that there is expertise that London can bring to the insurance and pensions industries in Saudi Arabia, as well as other underdeveloped industries that could benefit from the help of UK companies.
Lyons also plans to highlight the innovation taking place in the UK, with an emphasis on early-stage businesses in tech, fintech, life sciences, and biotech. The UK boasts four of the top 10 and seven of the top 20 universities in the world, and Lyons believes that there are significant investment opportunities in the country. He noted that countries like Saudi Arabia have recognized these opportunities and have made investments in renewable technologies.
“The Gulf states are looking at financial services as offering one potential avenue for growth, and there’s real expertise in London on this front that they’re looking to access and discuss — our close relations mean there’s a level of trust to have open discussions,” he said.
“I think as Saudi Arabia looks to develop its financial services, there’s expertise that we can bring to the insurance and pensions industries in Saudi Arabia, with there being other underdeveloped industries that could also benefit from the help of UK companies.”
Finally, Lyons mentioned the recent passing of the Inflation Reduction Act in the US, which will pump some $360 billion in subsidies into domestic companies to stimulate growth in renewable technology.
