Increasing scale in the pensions industry should be the priority before enacting investment reforms, such as the Mansion House Compact, People’s Partnership CIO, Dan Mikulskis, has stated.

Addressing the Pensions Age Spring Conference, Mikulskis argued that bigger was better for pension investment, but that there were not many really large, scaled up players in the UK pensions industry.

“Ideally, scale comes before lots of other interesting things that folks want to do; some of the things the minister [in an earlier session] referred to were great, but scale should be the priority, and then look at some of the other things,” he said.

Mikulskis argued that if large UK pension institutions were allowed time to scale up, government desires for pension investment, such as increased investment in UK productive assets, would follow.

“I think if you had a dozen £50bn plus large master trust schemes, like what you have in Australia, you’d be getting a lot more direct investment,” he continued.

“I do think that things like Mansion House are a little bit misguided and put the cart before the horse; it’s trying to say ‘let’s do the private market stuff before we even develop the scale to do it’. Scale is great, let’s focus on scale first.”

Earlier in the day, Pensions Minister, Paul Maynard, had discussed some of the government’s pension policy plans, and Mikulskis praised the work on consolidation and small pots as they were helping towards achieving scale.

“My view would be focus on those things and some of the other things will come later, the direct investment, the pot for life, makes a lot more sense once we’ve got more scale,” he said.

Moving the discussion to outsourced chief investment officers (OCIOs), Mikulskis noted that large pension schemes outsourcing themselves to OCIOs would leave the UK with less asset owners.

“Some asset managers do find a way to behave more like asset owners, which is great, but I think it’s a negative development in the landscape that large schemes outsource themselves to asset managers,” he stated.

“That may be a bit of a controversial view.”

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