Revealed: Teachers unions bet £120m on hedge funds

The National Education Union (NEU) has invested three-quarters of its assets in risky investments in «diversified growth.» Credit: Andrew Mathews/PA

Teachers' union threatening strikes before Christmas has come under fire for pumping nearly £120m of its pension fund into aggressive hedge funds.

The National Education Union (NEU) has invested three-quarters of its assets in risky «diversified growth investments» — what City sources say is synonymous with hedge funds and private equity assets.

After inquiries from NEU reported to this newspaper that its pension trustees have reviewed and are selling riskier investments.

According to recent reports, about £119m has been invested in this category. And weighing the entire portfolio at 76% caused alarm among pension experts.

John Ralph, an independent pension consultant, said: “More than three-quarters of her assets are in 'diversified growth funds', which is clear. For the sake of openness and transparency, the NEU should disclose exactly what is hidden in this universal category.

«It will certainly include hedge funds and other investments that NEU members may not like.»

Last night, a spokesman for the NEU stated: “The NEU Pension Scheme is fully compliant with the reporting requirements for its investments to both the Pension Regulator and its members.

“The investments of the NEU Pension Scheme include a number of pooled investment funds that are normally used by pension schemes in the UK. The term DGF simply means that assets are diversified across a range of different asset classes that are expected to deliver good long-term returns.

“The NEU Pension Fund Trustees recently conducted an investment strategy review in which the Trustees agreed to reduce overall exposure to diversified growth funds and replace them with assets that are more focused on mitigating ESG [environmental, social and governance] risks.”

Dr Mary Bausted, Joint Secretary General of the National Education Union (NEU), speaks to the media in front of the Ministry of Education in London. : Jonathan Brady/PA

The revelations come after the NEU threatened to strike until the end of the year after dropping a £1,000 one-off bonus this year and a 4.3 percent hike in 2024. Most public school teachers in England received 5% in 2022.

Dr Mary Busted, Joint Secretary General of the NEU, whose annual remuneration of £152,398 is reported to have called the proposed pay deal “ offensive.»

Another joint secretary-general, Kevin Courtney, paid £140,960, said «We're not ruling anything out.»

Dr Bausted and Mr Courtney will hand over their powers to far-left candidate Daniel Kebede in September. Mr. Kebede will become general secretary of 500,000 people after winning the leadership election, in which only 9% of the members voted.

Mr. Kebede is known not only for his left-wing approach to the economy, but also for his public statement about striving to «reclaim control from the hands of a brutally racist state.»

At a Socialist Labor Party conference on Marxism last July, he said, “It's much more [than] a matter of pay. It's about reorganizing society.”

Meanwhile, hedge funds are seen as central to the capitalist agenda. Their managers often take short-term positions, betting that the financial markets have not «taken into account» the odds of a current or future event.

NEU members in England will go on strike on 27 April and 2 May after rejecting a £1,000 one-time increase this year and a 4.3 per cent rise next year. Most public school teachers in England received a 5 per cent raise in 2022.

Many pension funds invest in hedge funds or private equity funds to supplement income from pension assets and limit the amount of extra money needed to inject pension funds. company or union if the scheme is in short supply.

However, they tend to keep this proportion significantly lower, instead investing in lower risk assets such as bonds or listed stocks, to ensure that members' pension benefits can be met.

NEU's latest financial statements are for the year ending August 2021. Reports for the year to August 2022 are scheduled to be released in the coming months.

Reports show the NEU pension scheme is struggling with a £61m deficit, which has grown by £3m in a year.

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