Investment in productive finance refers to investment that expands productive capacity, furthers sustainable growth and can make an important contribution to the real economy. Examples of this include plant and equipment (which can help businesses achieve scale), research and development (which improves the knowledge economy), technologies (for example, green technology), infrastructure and unlisted equities related to these sectors.
Productive finance investment can generate desirable outcomes for investors. It also provides various challenges, including that it may require long-term commitments from investors in some cases.
The economic uncertainty created by Covid means that it is now more crucial than ever that a long-term investment culture is fostered that ensures good outcomes for consumers, while aiding economic recovery.
The working group will build upon work already undertaken to investigate the challenges and potential barriers to investment in productive finance assets in the UK, including the HMT’s Patient Capital Review Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window and the Asset Management Taskforce’s UK Funds Regime Working Group’s Long-Term Asset Fund Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window (LTAF) proposal.
For any questions about the working group please contact FSSR-Productive-Finance-Secretariat@bankofengland.co.uk; ProductiveFinanceWG@fca.org.uk.