As a child I spent many a summer in the swimming pools and discos of French campsites, but never went to Center Parcs, Butlins or similar holiday parks in the UK. Maybe it was the effect of TV advertising on me as a child, but I have always viewed UK holiday parks as wannabe tropical paradises. The problem was they aren’t that tropical or much of a paradise, unless of course you consider Bognor Regis falls into that category.
But maybe I missed out because those I know who have holidayed at the likes of Center Parcs – people of my age this is, not just kids – have always had a great time, some having even been on more than one occasion.
And just to hammer home the point, it seems even investors are seeing the merits of tapping into the £6bn UK holiday parks industry. This week pension funds from both Waltham Forest and Surrey County Council allocated £20m each to a leisure property fund, which operates a portfolio of 15 holiday parks in the UK.
It is easy to understand why as a combination of ongoing austerity and a weak pound has meant more people are holidaying in the UK. But perhaps more than this, it signals a shift in investor mentality away from traditional asset classes towards uncorrelated sources of return that offer inflation-linked incomes and are backed by real, more esoteric, assets.
The other big topic for inflation-linked income is of course investing in UK infrastructure and all the talk has been about how schemes would jump at these assets. However, a couple of conversations I had recently have suggested the supply side needs to get its act together because not only is there a lack of adequate infrastructure assets to invest in at present, but the private equity-type strategies that do have capital invested have not actually put that capital to work.
But it’s not just the providers as there also has to be willing from the trustee side. SPC president Roger Mattingly told me recently he fears UK trustees are not spontaneous enough to snap-up infrastructure opportunities in this country, adding if we are not careful bigger pension funds from overseas will sweep up these assets as soon as they are ready.
There has been much talk about infrastructure, but very little progress and I wonder how much longer investors will wait for these so-called opportunities. So rather than take a vacation, maybe in the meantime investors will follow Waltham Forest and Surrey and seek more unconventional ways of accessing real assets and inflation-linked incomes.
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