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National Wealth Fund (United Kingdom)

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National Wealth Fund
FormerlyUK Infrastructure Bank (2020-2024)
Company typeSovereign Wealth Fund
IndustryFinancial services
FoundedJune 2021
HeadquartersLeeds, England, UK
Area served
United Kingdom
Key people
AUM£27.8 billion (October 2024)[3]
OwnerUK Government
Websiteuknwf.org.uk

The National Wealth Fund (NWF), formerly the UK Infrastructure Bank, is the sovereign wealth fund of the United Kingdom.[4] The fund is publicly owned with its sole shareholder being the Treasury Solicitor in the capacity of HM Treasury.[5] The goal of the fund is to invest alongside the private sector in projects within the United Kingdom.[6] The bank has a total capitalisation of £27.8 billion.[7] The fund is a "strategic" sovereign wealth fund, targetting non-financial objectives such as development goals.[8] However, the fund's classification as a sovereign wealth fund is contentious.[9][10][11]

History

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2020–2024: UK Infrastructure Bank

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The UK Infrastucture Bank (UKIB), a development bank, was announced on 25 November 2020, under the Premiership of Boris Johnson.[12] It's founding document was published by HM Treasury on 17 June 2021.[5] The UKIB was intended to help with the government's plan to reach net-zero carbon by 2050, and to support economic growth in regional and local sectors across the United Kingdom.[5] Then Chancellor of the Exchequer, Rishi Sunak, stated that the bank would be tasked to invest in sectors such as "renewable energy, carbon capture, storage and transportation", and would provide "low-rate loans to mayors and councils to fund projects".[13] The bank was given initial capital amounting to £12bn, and was able to offer up to £10bn of government guarantees, with its final capacity being £22bn.[5][14]

2024: National Wealth Fund

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During the 2024 United Kingdom general election, the Labour Party (UK) pledged to launch a National Wealth Fund.[15] In July 2024, the incoming Chancellor of the Exchequer, Rachel Reeves, announced plans to align the existing UK Infrastructure Bank and the British Business Bank under a new National Wealth Fund with £7.3bn in funding.[16] However, a later review stated that the fund should be based inside an existing institution, such as the UK Infrastructure Bank.[17]

In October 2024, the UK Infrastructure Bank became the National Wealth Fund.[18] The mandate of the fund was extended to include a wider industrial strategy.[6] The fund was advised to work 'in close partnership' with the British Business Bank.[6] The fund receieved a scaled back cash injection of £5.8bn. This was £1.5bn less than the £7.3bn initially planned.[19]

Portfolio

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Portfolio
Name of Investment Location Investment amount Citation
South Bank Quay Teesworks, on Teesside £107m [20]
Fibrus Belfast £220m [21]
Cornish Lithium Cornwall £24m [22]
Netomnia Tewkesbury £25m [23]

References

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  1. ^ "What is the national wealth fund and what will it invest in?".
  2. ^ "The Board of Directors".
  3. ^ "UK Infrastructure Bank becomes the National Wealth Fund".
  4. ^ Williamson, Sarah Keohane. "The UK Has A New Sovereign Wealth Fund – Why Doesn't The U.S.?". Forbes. Retrieved 2024-10-27.
  5. ^ a b c d "UK Infrastructure Bank Framework Document" (PDF). www.gov.uk. 3 March 2021. Retrieved 31 January 2022.
  6. ^ a b c "National Wealth Fund: Mobilising Private Investment". GOV.UK. Retrieved 2024-10-27.
  7. ^ "National Wealth Fund: Mobilising Private Investment". GOV.UK. Retrieved 2024-10-27.
  8. ^ Nangle, Toby (2024-09-10). "Britain is building a new sovereign wealth fund — what can it learn from the others?". Financial Times. Retrieved 2024-10-27.
  9. ^ "Does Britain need a National Wealth Fund?". web.archive.org. 2024-07-14. Retrieved 2024-10-27.
  10. ^ Worstall, Tim (2024-07-10). "Why the National Wealth Fund won't pay off". CapX. Retrieved 2024-10-27.
  11. ^ Pratley, Nils (2024-06-19). "Advice to Rachel Reeves: rename the national wealth fund". The Guardian. ISSN 0261-3077. Retrieved 2024-10-27.
  12. ^ "National Infrastructure Strategy: fairer, faster, greener" (PDF). www.gov.uk. 25 November 2020. Retrieved 31 January 2022.
  13. ^ "Budget 2021: UK Infrastructure Bank to be based in Leeds". BBC News. 2021-03-03. Retrieved 2022-01-30.
  14. ^ "Launch of the UK Infrastructure Bank". Blake Morgan. 2021-06-29. Retrieved 2022-01-30.
  15. ^ Makortoff, Kalyeena (2024-07-09). "What is the national wealth fund and what will it invest in?". The Guardian. ISSN 0261-3077. Retrieved 2024-10-27.
  16. ^ "Boost for new National Wealth Fund to unlock private investment". GOV.UK. Retrieved 2024-10-27.
  17. ^ "New £7bn National Wealth Fund to start green investment 'immediately'". www.ft.com. Archived from the original on 2024-07-10. Retrieved 2024-10-27.
  18. ^ "UK Infrastructure Bank becomes the National Wealth Fund". National Wealth Fund. Retrieved 2024-10-27.
  19. ^ "Rachel Reeves cuts National Wealth Fund budget despite UK investment drive". www.ft.com. Archived from the original on 2024-10-14. Retrieved 2024-10-27.
  20. ^ Dawson, Kristy (October 25, 2021). "Thousands of jobs for Teesside as UK Infrastructure Bank invests £107m in Teesworks development". Teesside Gazette.
  21. ^ Breslin, John (April 27, 2022). "Ulster Bank lends £50m to Fibrus for roll-out of full fibre broadband". Belfast Telegraph.
  22. ^ "Cornish Lithium announces 'landmark' £53.6 million investment". Business Live. 8 August 2023. Retrieved 8 August 2023.
  23. ^ "Netomnia secures £25 million from National Wealth Fund to accelerate broadband rollout". National Wealth Fund. Retrieved 2024-10-27.
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