Member

There is also the risk of market distortion. Critics of mandation have warned that forced allocations could create an artificial demand for UK assets, inflating prices beyond their fundamental values and benefiting existing and often foreign shareholders at the expense of new UK investors. Such distortions could lead to inefficient capital allocation, prop up unviable companies and even hinder long-term economic growth. I should note here that the Government believe that private equity is a suitable asset class for mandated investment. I look forward to Amendment 119, from the noble Lord, Lord Vaux, for a full discussion of this issue, but it may be worth reminding members that investing in venture capital and private equity generally involves management fees of between 1.5% and 2%, plus a carry of 20%.