PIC’s investment portfolio falls by £7bn

Written by Adam Cadle

09/09/2022

PIC’s investment portfolio fell by £7bn in H1 2022, from £51.1bn to £44.1bn.

“The reduction in size despite our new business volumes during the period was due to the welcome increase in interest rates from their historic lows,” PIC stated. “Within a broadly matched portfolio, this reduction is also reflected with a corresponding reduction in pensioner liabilities.”

PIC said it continued to take a cautious investment approach and the overall makeup of the portfolio has remained broadly consistent to that at year end 2021. “This means we have favoured more defensive sectors such as UK financials, for example we have seen good opportunities including in the banking sector, where profitable conditions have started to return. UK financials remains our largest single sector allocation. However, aside from the UK government and government-backed securities, no single counterparty represents more than 1.4% of our portfolio.”

Corporate and government bonds represented 68% of PIC's overall portfolio at the half year (31 December 2021: 71.5%) of which 99.1% were investment grade rated (31 December 2021: 99.3%).

Privately sourced debt investments of £1.3bn were made in H1, including sectors such as higher education, with £70m invested in the period, and social housing, with £334m invested in the period.

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