BLOG

Chancellor Rachel Reeves' Leeds Reforms promise growth through financial deregulation, but they risk repeating pre-2008 mistakes. Pension funds face pressure to invest in expensive private equity, consumer protections are being quietly eroded, and banking safeguards dismantled. It's regulatory amnesia in action - and ordinary savers will pay the price.

The private equity industry promises profound pension improvements for retail investors, but Oxford professor Ludovic Phalippou's research reveals a different reality. Like Alice in Wonderland, investors risk falling down a rabbit hole where fund managers capture £1 trillion in fees while delivering returns barely better than simple index funds.

Private equity firms use IRR manipulation to claim impossible returns. KKR boasts 25.5% annually since 1976, Apollo claims 39%. But if KKR's first £31m fund truly compounded at 26%, it would be worth £2.6 trillion today. As Professor Phalippou explains, "IRR has become the theatre of private equity performance." With retail investors increasingly targeted, UK regulators must stop this deception.