On a blustery day on Tyneside, Sir Nigel Wilson is in his element. The Legal & General boss is visiting the Newcastle Helix, a £350million urban redevelopment he helped finance.
Wilson, who grew up on a council estate in nearby Newton Aycliffe, is about to step down after more than 11 years at the top of L&G.
Before he goes, he is keen to extol the Helix project, undertaken with Newcastle University and the city council.
Under his leadership L&G, which looks after £1.2trillion of pension and savings money, has become the biggest investor in Britain.
He sees himself as a pioneer of ‘inclusive capitalism’ and the Helix, on the 24-acre site of the old Newcastle Brown Ale brewery, is a concrete example.
From 1927 to 2005, the heady aroma of hops wafted from behind the high walls, but now it is being reinvented as a science and business park. The hope is it will boost the local economy by £960million and generate 4,000 jobs.
The UK economy has suffered from short-termism. But Wilson, 67, says he has been able to make long-term investments like these because he has been at L&G far longer than the typical FTSE 100 chief executive.
‘If you think of all jobs in public life, whether politics or business, the tenure is very short term,’ he says.
‘Look at housing: we have had 15 or 16 ministers in the last ten years. It is not long enough to make a dent. It would be far better if we had ministers who knew something about their area.’
Wilson is backing another development a few miles away, to create the UK’s first ‘health innovation neighbourhood’ in a 29 acre area around the old Newcastle General Hospital.
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The idea is that it will be a ‘living laboratory,’ where researchers from the University will work with local residents to help them stay healthier and happier as they age.
‘L&G is the glue that pulls it all together. We are the do-ers who make things happen. We provide money so there is no need to wait for handouts,’ says Wilson.
‘Preventative healthcare barely happens at scale. We hope the North East can be an exemplar.’
Thanks to the money and the connections at his command, he and L&G arguably have more influence on reshaping our urban landscape than most politicians.
‘We have invested well over £1billion in the North East, if you include Leeds. We are probably the biggest investor in the UK,’ he says.
The investment drive isn’t just happening in the North East. Wilson has ploughed money across the country, with some £30billion into more than 26 sites, including in Cardiff, Sheffield and the West Midlands.
His ‘inclusive capitalism’ philosophy is, he says, about delivering projects that are socially useful as well as profitable.
The theory is that it creates a virtuous circle. Savers see their pension contributions going into areas such as health research or affordable homes that directly benefit their communities.
This, Wilson argues, produces a long-term financial return and also gives people an incentive to save for retirement.
Social goals are all very well, but shouldn’t L&G just concentrate on chasing the highest profit?
‘We think it makes economic sense to try to solve meaningful problems and to make money at the same time,’ he says.
‘We have had a 20 per cent return on equity for a long time which is extraordinary in financial services. You get repeat business and new business because people trust you to do the right things. So economically it works too.’
One of his secrets, he says, is to be ‘really resilient’. ‘Every day in this job something goes wrong and it comes across your desk. You have to recognise that’s business. Be honest with yourself about your own mistakes.’
L&G has had difficult periods during his reign, including a hit to its share price last year due to the Liability Driven Investment (LDI) meltdown that followed the Liz Truss mini-budget in 2022.
The company was one of the biggest providers of LDI strategies and Wilson admitted being ‘caught by surprise’ by the level of stress in the market.
L&G shares have performed strongly since he took over and the company has been an attractive dividend-payer. However, performance has been sluggish over the past year.
As well as selling insurance policies and retirement plans, the group is a market leader in ‘pension risk transfers’.
These are deals where employers offload their retirement schemes onto insurance companies, because they no longer want to shoulder the potential liabilities.
This is a potentially lucrative business for insurers, as rising interest rates have made it easier to do deals. L&G recently agreed a £4.8billion buy-in with Boots pension scheme, the UK’s biggest risk transfer so far.
Those of a cautious cast of mind will point out this is a fast-growing, capital-intensive area where regulation is evolving. And in the world of pensions, history tells us there is always scope for things to go wrong.
As for Wilson’s next move, inclusive capitalism sounds like the kind of thing that might appeal to the more moderate elements of the Labour party.
So has he joined other business figures advising leader Sir Keir Starmer and shadow chancellor Rachel Reeves? ‘I am very happy to help all sides,’ he says diplomatically.
As for a new career in politics, he claims he genuinely has not decided what he will do next, but will take time out to think about it.
If he were chancellor at the Budget in March, he says he would push through pension reforms to encourage big British retirement funds to invest more in the UK, and he would chase more foreign direct investment.
‘The world is still awash with money to invest. We want as many people as possible to do better, and that means we must make a choice in how we use the capital we have and the capital we attract.
At a societal level we have under-invested in housing, health inequalities have risen, real wages have gone down and the consequence is that people are living a less happy and prosperous life.’
‘We need ten Legal & Generals to make a difference.’
Which raises a very interesting question: why aren’t other companies emulating L&G? Do his rivals simply lack vision and energy, or has Wilson become too much of a social evangelist?
Whatever the answer, his drive to improve lives in disadvantaged areas is relentless.
In the New Year, he will hand over to Antonio Simoes, an executive at Santander bank. Won’t it be hard to leave it all behind?
‘I’ve worked seven days a week for a lot of years and I don’t want to do that any more.
‘I don’t want to be a back-seat driver. L&G can make things happen, but I believe I can continue to make things happen.’
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