Masojada takes City office with a £3.2 trillion pension-investment push

Bronek Masojada, 64, has become Lord Mayor of the City of London after running Hiscox Ltd. for 21 years. His one-year, largely ceremonial term gives the former insurer a platform to press for UK growth and more domestic investment from roughly £3.2 trillion in pension savings.

Masojada has worked in insurance for three decades and plans to bring the same rigor to the job. His appointment comes as Prime Minister Andy Burnham’s government searches for ways to boost economic growth. Many financial-services firms sit steps from Mansion House, where he is based, and play a key role in the UK’s global standing.

What does this change for pension investors?

Masojada wants pension funds to direct more money into private assets, including UK startups. Previous Lord Mayors have pursued the same objective slowly. He must win over executives responsible for company pension schemes and the people overseeing funds, and he expects resistance.

“I don’t want to hear from them that there is not enough British capital and British opportunities, when they don’t know where their own capital, that they have influence over, is going,” Masojada said in an interview.

He also plans to challenge the argument that pension trustees cannot direct money into British and private assets because their fiduciary duty requires them to seek the best returns. As private assets boom worldwide, Masojada’s challenge to trustees is blunt: “Tell me how you are living up to your fiduciary duty by not investing in these assets.”

For pension trustees, the change is a new burden of persuasion. Masojada wants them to explain how declining private assets complies with their duty to seek the best returns.

The stakes are substantial: the UK’s roughly £3.2 trillion in pension savings could provide startups with more backing, but moving that capital requires institutional commitments. Nick Lyons, Lord Mayor from 2022 to 2023, assembled insurers and asset managers that pledged more UK investment; some remain hesitant about more dramatic changes.

Why does Masojada value stability?

Masojada believes the private sector must also contribute to growth, alongside government measures such as adding £20 billion to the publicly owned British Business Bank and National Wealth Fund. He acknowledged that this position runs against some views within the business community.

Masojada also defended Chancellor of the Exchequer John Healey’s budget last month, which increased bank taxes and drew anger from international banks. Others said the government could have done more to promote growth.

“It was criticized for a no-change budget, but actually I think it was part of its value, that it was a small change budget,” Masojada said. “What businesses value is stability and predictability.”

Can the City retain its funding and police force?

The government’s so-called fair funding reforms would redirect money from richer areas to deprived ones and could produce a large reduction in City funding. Masojada said keeping more of the tax paid by businesses would help. “I think that would work very well for us,” he said.

The City has pushed back against planned national reductions in police numbers. The changes have cast doubt over whether the City of London police will remain independent, with critics warning that losing the force would sacrifice its fraud-prosecution expertise.

“The City believes there is value in keeping” the police force independent, Masojada said. “We want the Square Mile to be the safest place to be.”

What will Masojada change for job seekers?

Masojada has chaired the East End Community Foundation, a charity that tackles inequality in some of London’s most deprived areas, for five years. As Lord Mayor, he plans to improve work experience and training opportunities for young people and disadvantaged communities, drawing partly on his experience with his five children.

He also wants City firms to improve how they handle job applications. Too often, he said, the process is a “black hole,” with young people not hearing anything from firms.

Masojada also plans to challenge the City Bridge Foundation, the charity that oversees the City’s bridges. Temporary barriers remain on London Bridge nine years after the 2017 terrorist attacks, despite Masojada crossing it every day.

“The City Bridge Foundation should fix that in my view and I have told them,” he said. “Where we have the muscle to do something, I believe we should.”

What does the Lord Mayor do?

Masojada inherits an office dating back to the 12th century, responsible for promoting the UK’s financial-services sector globally and providing civic leadership locally. He will act as a de facto ambassador for London’s banking, insurance and other financial-services businesses, while projecting the message that the UK is the “land of opportunity.”

Masojada frames that mandate around a national economic case. “We need to grow and prosper, because that’s beneficial to the whole country,” he said.

Masojada cites the sector’s economic weight: the UK’s financial and professional services account for 12% of national tax revenue. About 700,000 people come into the City for work each day, more than before the pandemic and Brexit.

Masojada joined Hiscox in 1993 and became chief executive in 2000. Under him, staff increased from 200 to 3,500 and shares rose from about 33 pence to about £8.60 ($11.37) at the end of 2021, when he stepped down.

“That’s the value of staying and scaling,” Masojada said. He moved from South Africa to the UK as a Rhodes Scholar at the University of Oxford in 1985, then worked at consultancy McKinsey.

His one-year term will test whether demands for British pension capital, business-tax retention and an independent police force become concrete investment and funding decisions.