Archeologists discover 2 giant sphinxes at the lost 'Temple of a Million Years' built by a great pharaoh in Egypt 3,300 years ago

Alia Shoaib
Sat, January 22, 2022

Two large sphinx statues were discovered during the restoration of a temple in Luxor, Egypt.Egyptian Ministry of Tourism and Antiquities

Archeologists found two large sphinx statues during the restoration of a temple in Luxor, Egypt.

The "Temple of Millions of Years" was a vast funerary temple of King Amenhotep III, who ruled about 3,300 years ago.

The limestone statues measured around 26 feet in length and depict the Pharoah in the form of a sphinx.

Archeologists discovered two colossal sphinx statues while restoring the ancient Egyptian funerary temple of King Amenhotep III, according to the Egyptian Ministry of Tourism and Antiquities.

King Amenhotep III was a pharaoh who ruled Egypt around 3,300 years ago when it was rich in gold and oversaw a peaceful period of prosperity and growing international power.

The limestone statues measure around 26 feet in length and depict King Amenhotep III in the form of a sphinx – a mythological creature with a lion's body and a human head – wearing a mongoose headdress, a royal beard, and a wide necklace, the ministry said.

An Egyptian-German archeological mission found the statues half-submerged in water inside the Luxor temple, known as the "Temple of Millions of Years."

The team also found three black granite busts of the goddess Sekhmet, a goddess of war also associated with healing which is often depicted as a part lion.

Remains of the walls and columns were decorated with inscriptions of ceremonial and ritual scenes, the ministry said.

A granite bust of the goddess Sekhmet, a goddess of war also associated with healing who is often depicted as part lion.Egyptian Ministry of Tourism and Antiquities

Inscriptions on the remains of a wall or column.Egyptian Ministry of Tourism and Antiquities

Dr. Horig Sorosian, head of the Egyptian-German mission, said in a statement that the large sphinxes indicated the location of a procession road used to celebrate festivals.

After the statues underwent cleaning and restoration, archeologists found an inscription that said "the beloved of the god Amun-Re" across the sphinx's chest, referring to the sun god often depicted as a sphinx.

The vast funerary temple, built close to the Nile river by King Amenhotep III, was destroyed by an earthquake that swept Ancient Egypt.

The mortuary temple's main purpose was as a place for offerings for Amenhotep III for after his death and movement into the afterlife.

The project to restore the temple and the Colossi of Memnon, two massive stone statues of the pharaoh, began in 1998 under the supervision of the Egyptian tourism ministry, it said in a statement.

Greco-Roman rock-cut tomb discovered west of Aswan

Nevine El-Aref , Friday 14 Jan 2022

The joint Egyptian-Italian mission working in the vicinity of the Mausoleum of Aga Khan, west of Aswan, uncovered a Greco-Roman rock-cut tomb during work carried out during the last archaeological season.

  

The tomb consists of two parts, according to General Director of Aswan and Nubia Antiquties Abdel-Moneim Said Mahmoud.

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The first part is a rectangular building containing the entrance built above ground from sandstone blocks covered by a vault of mud bricks.

The second part leads from the entrance to a rectangular courtyard carved from the rock in which four burial chambers are located.

About 20 mummies were found in the burial chambers, the majority of which are still well preserved.

“It is a mass grave that includes more than one family,” said Patrizia Piacentini, professor of Egyptology at the University of Milan and head of the mission on the Italian side.

She added that many important archaeological artefacts were unearthed from the Greco-Roman era, including offering tables, stone panels written in hieroglyphic script, a copper necklace engraved in Greek, a number of wooden statues of the Ba bird and parts of coloured cartonnage (a material used in funerary masks).

During the archaeological survey in the area, a number of coffins were found in well preserved condition, some of which are made of clay and others of sandstone.

In Photos: Huge blocks for Sphinx-shaped King Amenhotep III colossi remain from ritual scenes uncovered in Luxor

Nevine El-Aref , Thursday 13 Jan 2022

A German-Egyptian mission directed by Hourig Sourouzian uncovered a collection of huge limestone pieces belonging to a pair of royal sphinxes as well as the remains of walls and columns decorated with festive and ritual scenes in Luxor.

The mission was being carried out in the temple of Amenhotep III as part of ‘The Colossi of Memnon and Amenhotep III Temple Conservation Project’

Mostafa Waziri, the secretary-general of the Supreme Council of Antiquities, announced that among the discovered blocks are those of a pair of gigantic limestone colossi of king Amenhotep III in the shape of sphinxes wearing the nemes headdress, the royal beard, and a broad collar around the neck.

Both colossal sphinxes were found half submerged in water at the rear of the gateway of the third pylon. The heads of these sphinxes have been subject to meticulous cleaning and consolidation. Pieces of their inscribed chest were recovered during the clearance, one of them holding the end of the royal name who is “the beloved of Amun-Re.” Other pieces of the body and the paws were safely removed in forms and will be conserve carefully.

The mission has also discovered three busts and three lower parts of statues of the lioness goddess Sekhmet in granodiorite at the façade of the Peristyle Court and in the Hypostyle Hall of the temple. These pieces will be reassembled with others found earlier at the site and will be put on display in the temple during the realisation of the site management project.

Pieces of the sandstone wall decoration in the relief depicting scenes of the Heb-sed, the jubilee festival of Amenhotep III, and offering scenes to diverse deities were also unearthed along with a small granodiorite statue of an official seated with his wife, likely to be dated to the post-Amarna period, when restoration works in this temple were carried out by artists and scribes.

Column bases and foundation blocks in the southern half of the Hypostyle Hall were also found showing that this hall was much larger than it was known, with more columns.

Sourouzian, the head of the archaeological mission, revealed the importance of such discoveries by explaining that the presence of this pair of colossal sphinxes attests to the beginning of the processional way leading from the third pylon to the Peristyle Court, where the beautiful ‘Festival of the Valley’ was celebrated each year, as well as the jubilee festivals of the king in the last decade of his reign.

She explains that preliminary research on these colossal sphinxes reveals that their length was about 8 metres. Now, all discovered blocks and colossi are under restoration in an attempt to re-erect them in their original location in the temple.

The ‘Temple of Millions of Years’ was the largest of all funerary temples on the West Bank, however, it was toppled by a strong earthquake in antiquity.

The Colossi of Memnon and Amenhotep III Temple Conservation Project has been ongoing since 1998 under the auspices of the Ministry of Tourism and Antiquities and the German Archaeological Institute in Cairo. Various new structures have been uncovered, along with many architectural remains; a monumental stela and numerous colossal statues of the king were mounted and raised in their original place.

Ancient Egyptians Celebrated the Feast of Drunkenness with Blood-Red Beer

One of history’s earliest mixed drinks was made to appease a ferocious goddess.

BY DIANA HUBBELLFEBRUARY 26, 2024


This red ochre-tinted beer was served in honor of the goddess Hathor.
COURTESY DORA GOLDSMITH
THIS ARTICLE IS ADAPTED FROM THE FEBRUARY 24, 2024, EDITION OF GASTRO OBSCURA’S FAVORITE THINGS .

There’s a whole lot of hair-splitting about who came up with the first cocktail.

A quick Google search will reveal a litany of opinions. Some claim that the Sazerac, which first appeared around the 1830s, holds the distinction. Others would say that the unnamed concoction of spirits, sugar, and bitters—essentially, an Old-Fashioned—published by an anonymous American bartender in an 1806 newspaper is the winner.

Yet there are plenty of older examples of mixed drinks, from the hot ale flips served in New England taverns in the late 1600s, to English possets, which date back to the Middle Ages. Plus, people on the Indian subcontinent (who figured out distillation earlier than their European counterparts) were mixing up punches centuries earlier.

Last year, I spoke with cocktail historian Amanda Schuster, who has a recipe for a boozy Scottish drink with roots dating back to the 1400s in her book Signature Cocktails. She pointed out that people have been mixing stuff with alcohol to make it taste better for a very, very long time

.

Dora Goldsmith is an Egyptologist at Berlin’s Freie Universität. 

COURTESY DORA GOLDSMITH

That got me thinking: just how old can mixology be?

According to Dora Goldsmith, an Egyptologist at Berlin’s Freie Universität, the ancient Egyptians were making mixed alcoholic beverages in the Ptolemaic Dynasty, around 300 BC.

While there’s evidence of distilled liquor dating back to 800 BC in parts of Asia, Egyptian “cocktails” more resembled fortified wines and beers. And when the debauched Feast of Drunkenness rolled around, these fragrant, sweet elixirs flowed freely.
Sacred Knowledge

Goldsmith has translated what may be instructions for two such libations from a religious text. “This is a hymn, as far as the text genre goes, but behind that hymn are traces of a recipe,” Goldsmith explains.

Versions of that same sacred song, known as “The Menu Song,” were chiseled onto the temples of Dendera, Philae, and Athribis. “It was recorded many times, which means it was important to the ancient Egyptians.”

As Goldsmith points out, four other Egyptologists have published analyses of this text before her and each has walked away with a subtly different interpretation of what it means. “The truth is that no one is incorrect and no one is correct,” she says.

This ancient hymn was inscribed on the Temple of Dendera.

NICK BRUNDLE PHOTOGRAPHY / GETTY IMAGES

The ingredients and steps are cloaked in metaphors and poetic language. But it’s not an accident that the text is tricky to follow.

“This belonged into the realm of restricted knowledge. [The ancient Egyptians] believed in the notion that knowledge is power. One way of immortalizing a document that is important while keeping it a secret is to write it in stone, but in a way that is very hard to understand.”

Goldsmith believes that hidden behind these layers of meaning are recipes for preparing two drinks, one for the mortals and one for the gods. The former may have been served at the Feast of Drunkenness, ancient Egypt’s wildest bacchanal.

“The Menu Song was probably sung on these [feast] days, while they drank this fragrant beer, and were in complete ecstasy,” Goldsmith says. “What is important to understand is that beer-brewing here is a mythological act. The brewing itself ensures that the cosmic order remains intact.”
The Feast of Drunkenness

Before we look at the drinks themselves, let’s talk about Hathor, the goddess for whom they were created. This most ancient and powerful of goddesses had a wide mythical jurisdiction over music, sexuality, fertility, motherhood, as well as precious metals such as gold and fragrances including myrrh and labdamum.

“She has two sides,” Goldsmith says. “On the one hand, she’s very loving, but she can also be a raging lunatic. She’s a cute little kitty cat one day and a raging lioness the next.”

Hathor was also the goddess of intoxication. In the myth of the Destruction of Mankind, Ra, the sun god, orders Hathor to slaughter humanity for their lack of reverence. In this tale, she becomes Sekhmet, a lioness goddess (the two deities are sometimes used interchangeably in ancient Egyptian mythology and share attributes).

In ancient Egypt, beer brewing was women’s work. 

WERNER FORMAN / GETTY IMAGES

“Hathor was bloodthirsty, so she was very happy with the task,” Goldsmith says. Before long, the goddess was rampaging out of control. “Ra told her ‘Enough of the killings,’ but she didn’t want to stop,” Goldsmith says.

To halt the carnage, the sun god resorted to trickery. One version of the story recounts that Ra flooded a field of barley and allowed it to ferment, while another claims he simply poured out 7,000 jars of beer. In either case, Ra cleverly dyed the beer crimson using red ochre, a type of edible clay rich in iron oxide.

“When Hathor arrived, she started drinking what she thought was blood,” Goldsmith says. After guzzling the better part of a field of beer, the goddess became too drunk to continue her murder spree and took a nap, thus saving humanity.
Continuing the Ritual

In honor of Ra’s intervention, ancient Egyptians would celebrate each year by drinking lots and lots of beer. By all accounts, the Feast of Drunkenness lived up to its name.

“People would get so drunk that they would climb on the temples,” Goldsmith says. “It was a task on this day to get completely drunk, not just a little, but so much so that you really didn’t know what was going on anymore. [The idea was that] in this state of complete intoxication, you would be able to perceive the goddess better for who she is.”

The Menu Drink included red ochre, beer brewed from flatbreads, malt, dates, date syrup, black cumin seeds, and other ingredients. 

COURTESY DORA GOLDSMITH

It’s important to remember that beer brewing was a vital part of life throughout much of the ancient world. It was also historically women’s work. Both Ninkasi, the ancient Sumerian goddess of brewing, and Nephthys, another ancient Egyptian goddess associated with beer, were powerful, feminine beings deemed worthy of veneration.

Goldsmith attempted to recreate the elixir that got the population so wildly intoxicated by following 18 steps laid out in the hymn. Each refers to a part of the earthly beer-making process as well as brewing a drink for the divine realm. The imagined drink for the goddess herself included wine enhanced with costly labdanum resin and gold.

For the mere mortals, the text faithfully describes the steps of brewing beer, starting by soaking flatbreads in water and allowing them to ferment, a practice archeologists believe was common in ancient Egyptian brewing.

Malt adds a distinctive flavor to the Menu Drink. 

COURTESY DORA GOLDSMITH

From there, the beer gets a few specific enhancements: red ochre to commemorate the myth and lend a striking color, dates and date syrup to lend sweetness, black cumin seeds for an earthy flavor, and mastic and myrrh to perfume the whole mixture.

Although there is no record of the exact quantities of each ingredient, modern-day drinkers could easily make their own approximation. All of these ingredients are edible and available to purchase online.

Goldsmith plans to publish additional details about her versions of the recipes, but until then, is selling kits containing cocktail ingredients and instructions upon email request.

“Both recipes are representations of the goddess Hathor,” Goldsmith says. The result is both laden with symbolism and a pretty tasty beer cocktail. “Beer brewing [in this case] is a mythological act,” Goldsmith says. “The brewing itself ensures that the cosmic order remains intact.”

TWO OTHER GODDESSES OF THE BLOODY FEAST ARE:

THE SUMERIAN / CAANANITE GODDESS ANAT

AND THE EGYPTIAN GODDESS SEKHMET

SEKHMET HOT WEATHER MEME

MOTHER IS THE GOD 

WE CALL TO IN OUR PAIN 

ONE OF MY ROOM MATES WHEN I WAS IN HOSPITAL FOR MY AMPUTATION WAS SEVERLY INJURED IN A MOTORCYCLE ACCIDENT AND IN HIS PAIN AND ANGUISH HE CALLED FOR HIS MOTHER 

MY OTHER ROOMMATE WAS IN FOR NECROPHISHITIC BACTERIAL INFECTION IN HIS KNEE REPLACEMENTS THAT HE HAD JUST HAD DONE A MONTH EARLIER 

IN PAIN ASLEEP HE TOO CRIED FOR HIS MOTHER

NUIT ISIS HEKATE HERA 

ASTARTE DURGA ANAT SEKHMET ARTEMIS 

KORE MARA DOLORES 

THE GREAT MOTHER IS THE ORIGIN 

OF ALL RELIGIONS 

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Goddesses and witches star in British Museum show


Wed, May 18, 2022,

Alluring, warrior-like or nurturing, goddesses and other female spiritual beings from around the world are the focus of a new exhibition at the British Museum.

Entitled "Feminine Power: The Divine to the Demonic", it includes ancient sculptures of Roman goddesses Venus and Minerva and Egypt's lioness-headed goddess Sekhmet, as well as modern images of deities worshipped today.

The exhibition is the "first with a cross-cultural approach to this extraordinary, absolutely fundamental subject", the London museum's director Hartwig Fischer told reporters.

Specially for the show, the museum commissioned a brightly painted icon of the Hindu warrior goddess Kali wearing a garland of severed heads, from Kolkata-based artist Kaushik Ghosh.


The exhibition, which runs until September 25, also features commentary from high-profile figures including the feminist writer Bonnie Greer and classicist Mary Beard.

"We're not trying to tell people what they should think or how they should feel about this," curator Belinda Crerar told AFP, saying she wanted the exhibition to start a conversation.

One section on "compassionate" figures such as the Virgin Mary, the mother of Jesus, notes that reverence for such female divinities "in many societies has not translated into a higher status for women themselves".

"This is the big question" raised by the exhibition, Crerar said.

"It's not straightforward and there is no singular answer to it."

"I believe there is a link between spiritual ideas relating to femininity and masculinity and how... women and men are viewed, but it is culturally specific."

For a section called "Magic and Malice" about witches and demons, the museum consulted a collective of practising British witches called Children of Artemis.

"What we felt was really important to do in this section was to actually work with a group of men and women today who identify as witch or modern pagan or who practise Wicca," said project curator Lucy Dahlsen.

"Those relationships have been really important, to ensure we are looking at a living tradition in an appropriate way."



Some reactions came as a surprise.

She pointed to a Pre-Raphaelite-style painting by John William Waterhouse of Greek goddess Circe casting a spell while wearing a see-through gown over her naked body.

Many see this painting as "epitomising the male gaze and an image of a sorceress depicted as a kind of femme fatale," Dahlsen said.

But one British witch, Laura Daligan, commented that the picture was not far off.

Witches "don't always practise with clothes on – it is kind of realistic in a way," she said in a comment posted online by the museum.

The show includes a book entitled 'The Witches' Sabbath' from 1510 by the German Renaissance artist Hans Balding Grien 

UK

WORKERS CAPITAL

Women born in 1950s die while waiting for pension payouts

Lauren Almeida
Fri, 18 August 2023 

Women affected by the increase in state pension age have been protesting for years - Jenny Matthews/Getty Images Contributor

More than 250,000 women born in the 1950s have died while waiting for state pension payouts in a draw-out campaign, it is claimed.

Until 2010, women were entitled to receive the state pension from the age of 60. The Government announced in 1995 that this would gradually increase to the age of 65 to bring it into line with men. Both ages now rise in tandem.

However, campaigners have argued women born in the 1950s, who were most affected by the change to when they could retire, were not given enough notice or detail.

Campaigners say around four million women were pushed into financial hardship as their retirement plans were knocked off course.

More than two-fifths of women in this generation have struggled to pay essential bills in the last year, the Women Against State Pension Inequality, or “Waspi”, group said.

The Parliamentary Ombudsman, the Government watchdog, ruled in 2021 that the Department for Work and Pensions had failed to provide clear communication around state pension age changes. However, it is yet to publish any recommendations for redress.

Angela Madden, who leads the “Waspi” campaign, said: “For the 250,000 women who have died while waiting for this issue to be resolved, justice delayed is truly justice denied.”

This equates to around 100 deaths per day, the campaign group said.

Ms Madden added: “The Ombudsman’s investigation has been going on for five long years, and it is two years since he confirmed the DWP was guilty of maladministration.

“To keep women waiting a single further day for a proper offer of compensation just shows an appalling disregard for all of us.”

Susan Taylor, a 65-year-old woman affected by the state pension age rise, said: “Both my sister and I were born in the 1950s and had our retirement plans completely devastated by the state pension age fiasco.

“I lost her at 59 to cancer and was diagnosed myself with lung cancer at 62. I have no quality of life and the financial pressures I face are immense. Some days it’s extremely hard to see anything but a miserable end to a lifetime of hard work as the fight for justice for so many women continues.

The Parliamentary Ombudsman was expected to publish the second stage of its investigation by the end of March this year, but was delayed indefinitely after a legal challenge to its original draft.

The final stage three of its report is expected to recommend possible solutions, however the High Court ruled in 2019 that the Government was right to correct “historic direct discrimination against men” and underlined that the ombudsman cannot reimburse “lost” pensions.

A spokesman for the Government said: “We support millions of people every year and our priority is ensuring they get the help and support to which they are entitled.

“The Government decided over 25 years ago it was going to make the state pension age the same for men and women. Both the High Court and Court of Appeal have supported the actions of the DWP under successive governments dating back to 1995 and the Supreme Court refused the claimants permission to appeal.”

A spokesman for the Parliamentary Ombudsman said: “We are confident that we have completed a fair and impartial investigation. As an independent ombudsman, our duty is to provide the right outcome for all involved and make sure justice is achieved.

“We hope this cooperative approach will provide the quickest route to remedy for those affected and reduce the delay to the publication of our final report.”

The state pension may no longer exist for these retirees

Lauren Almeida
Fri, 18 August 2023

gen z money

If you are under 40, the state pension will probably look very different by the time you retire. In fact, there is no guarantee that it will even exist.

Civil servants, industry experts and even some pensioners have been shouting for years: the state pension system is just too expensive for the Treasury to keep up. With ever larger payments to an ever growing number of pensioners, costs are spiralling out of control – and fast.

No political party wants to upset its oldest voters, but experts have warned the Government will have to change the way the system is set up or face a fiscal crisis.


In just 50 years, one in every four Britons will be pensioner age. That’s more than three times the current population of Scotland. And with birth rates in decline, less than two-thirds will be of a working age.

This is a problem because the state pension is a “pay as you go” scheme, which is fueled by general taxation. If there are more retirees and fewer workers, the system becomes more and more fragile.

This is complicated further by the Conservative’s triple lock policy. It promises that state pension payments increase each year in line with the highest of the previous September’s inflation, wage growth or 2.5pc.

It meant this year the new state pension jumped by a record 10.1pc, surpassing £10,000 for the first time. Record wage growth is paving the way for yet another bumper pay rise next year, and will probably push it beyond £11,000 a year per person.

At some point, this will become unsustainable, but warning signs are ignored time and again. Even the Government’s own accountant warned that the “fund” that measures Britain’s state pension payments will hit zero in just two decades unless the Government acts.

The “National Insurance Fund” records workers’ and employers’ National Insurance contributions, as well as how much the Government spends on various benefits, including the state pension.

This “fund” is theoretical, as the Government can effectively deploy its financial resources as it sees fit. But it serves as a further alarm bell that while improving longevity is welcome, it is straining public finances.

Sir Steve Webb, a former pensions minister and now a partner at the consultancy LCP, said increasing the state pension age was a key “lever” the Government could pull to control spending.

“If you pay the state pension age later, then it pushes down costs,” he said. “This is a lever that the Government has pulled before and almost certainly will again.”

However, history suggests that increases to the state pension age would likely deepen social inequality. This is because there are stark regional variations in life expectancy, and poorer people typically have fewer private pension savings to fall back on and no choice but to stay in work for longer.

When the state pension age increased from 65 to 66, one in seven 65-year-olds were pushed into income poverty as a result, the Institute for Fiscal Studies found.

And while the Government typically waits for an increase in life expectancy to ramp up the state pension age, this does not necessarily correspond with an increase in healthy life expectancy.

Government expenditure on healthcare has been steadily climbing for almost a decade and the bulk of it goes towards curative and rehabilitative care, according to the Office for National Statistics. In just five decades, state pensions, pensioner benefits and health and adult social care spending will be worth 27pc of GDP, IFS analysis of official data found.

Maxwell Marlow, of the Adam Smith Institute, a think tank, said: “Young people are often criticised as wasting our money on avocados or Netflix. But the reality is that most of our taxes go towards spending on the elderly.

“The unfunded state pension system is shocking. It is a ponzi scheme grand enough to make Bernie Madoff blush.”

Around one in four pensioners are millionaires, so the idea of a means-tested state pension has gained popularity quickly. This could make for more targeted support for the vulnerable. Inequality in this group is stark, with around half of retirees also relying on the state pension as their main source of income.

Anyone who has more than £1m in assets should not receive a state pension, the Adam Smith Institute has suggested. “The triple lock is unfit for purpose,” its researchers wrote in a report last year.

“This ratchet spending is becoming unsustainable and unjustifiable, and exposes the Government to large state pension payouts which outstrip the growth of the economy that underwrites them.

“An increasingly large divide has opened up in British society between generations in which the young lose out, while the elderly benefit.”

According to the think tank’s calculations, the Government could save the taxpayer £25bn a year if it stopped offering the state pension to those with assets worth over £1m.

It said an alternative was to means-test pensions for higher-rate taxpayers – those with a salary of more than £50,270 – to avoid the “difficult politics” of testing those on lower incomes.

Sate pension increase

While scrapping the state pension completely may sound like the simplest solution, this too would require decades of advance planning, as well as warning for those who it would affect first.

But Sir Steve acknowledged that removing the state pension could become a more feasible option in the very long-term, after there had been a generation that had enjoyed the full benefit of “auto-enrolment”.

The policy, which obliges employers to automatically enrol their staff into a pension savings scheme, was only enacted around a decade ago.

“You would still need a safety net however for those who auto-enrolment had missed,” he said. “Across the world, you would be surprised about how many countries offer something that can be recognised as a type of state pension – even the land of the free has got it.”

But until we reach crisis point, it is unlikely that the Government will be spurred into action, Mr Marlow added.

“We are in a gerontocracy,” he said. “The civil service, the Treasury, the DWP – they all need to talk about these costs. The Government will not act until they are pinned to the wall.”

A government spokesman said there was currently a surplus of funds in the National Insurance Fund, and it would be able to top up its balance if needed in the future. They added it was committed to the triple lock and as is the usual process, would conduct an annual review of benefits and state pensions in the autumn.

Britain’s largest pension scheme to invest billions in private companies in boost for savers

Nest to invest up to a fifth of pension pots into high-growth businesses over next decade

BySzu Ping Chan18 August 2023 • 7:44pm

Jeremy Hunt put pension reform at the heart of his Mansion House speech in July

 CREDIT: Aaron Chown/PA

Britain’s largest pension scheme will start investing billions of pounds in private companies in a boost to Jeremy Hunt’s plans to deliver higher returns for savers.

The National Employment Savings Trust (Nest), which looks after the retirement funds of a third of the British workforce, said it will invest up to a fifth of pension pots into high growth companies over the next decade.

Writing in The Telegraph, Mark Fawcett, Nest’s chief investment officer, said the move will offer most of its 12 million members the chance to enjoy “significantly higher” returns, with the risk spread over several decades.

He said: “We plan to step up our investment into private markets over the coming years, including more money into unlisted equities.

“Our view is simple – we don’t want Nest members missing out on an asset class which is so highly sought after.”

Mr Fawcett said Nest, the UK’s largest workplace pension scheme by members, would invest up to a fifth of younger members’ pension pots in private companies, which typically carry greater investment risk but can generate higher returns than publicly listed equities.

The policy is a significant vote of confidence in the Chancellor’s ambition to ramp up risk taking by pension funds to boost future retirement incomes.

Mr Hunt put pension reform at the heart of his Mansion House speech in July. The Chancellor wants the UK to rival countries including Australia and Canada that are home to huge pension schemes that invest in illiquid assets around the world, including in British infrastructure.

The risk-taking has led to higher rewards. Average annual pension fund returns in the UK were 9.5pc in 2021, according to Moneyfacts. This compares with a 20.4pc gain by the Canada Pension Plan Investment Board and 22.3pc increase delivered by AustralianSuper for the same year.

Defined contribution (DC) schemes like Nest promise a pension income based on the performance of stocks, bonds and other investments rather than a promise from an employer to sustain a certain level of income in retirement.

In July the Chancellor told an audience of bankers and finance bosses at the annual Mansion House dinner that nine of Britain’s biggest DC providers had signed a compact committing to invest at least 5pc of assets in unlisted equities by 2030.

Nest’s ambition to commit up to a fifth of assets for younger savers goes well beyond this. Mr Fawcett said there was “an especially large capacity to invest in these asset classes for our younger members,” who are decades away from retirement.

He said: “Those members have much greater ability to hold long-term illiquid assets compared to members approaching retirement, particularly when there are some assets which can be held in portfolios for decades.”

He added that “in the not-so-distant future” this could mean “a Nest member 40 years from retirement could have up to 20pc of their pension pot invested in unlisted equities”.

It is understood that Nest’s overall investment in unlisted equities, including private equity and infrastructure, will climb to at least 10pc of its portfolio by the end of the decade, potentially funnelling an extra £10bn into high growth assets.

Nest, which is publicly owned but operationally independent currently manages just over £30bn in retirement pots. This is forecast to balloon to £100bn by 2030. Mr Fawcett said this would give Nest the “size and scale to negotiate great deals” across a range of asset classes.

Mr Hunt has claimed that his compact with pension funds could help to boost retirement incomes by over £1,000 a year for a typical earner over the course of their career.

The Chancellor said: “British pensioners should benefit from British business success.

“This also means more investment in our most promising companies, driving growth in the UK.”

However, the Government’s own internal modelling suggests the very high fees charged by private equity firms could erase returns for pension savers.

High performance fees could even leave savers who invest in private companies £1,300 worse off, Department for Work and Pensions analysis showed.

Mr Fawcett insisted Nest did not pay performance fees “as a point of principle”.

He added: “All investment fits within our existing fee structure. This competitive fee structure also increases the probability that any net investment returns will meet our objectives.”

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Why we’re investing Britain’s pension pots in solar farms and fish and chip shops

By Mark Fawcett, chief investment officer of National Employment Savings Trust (Nest)

The Chancellor’s Mansion House speech back in July generated a lot of interest within the pensions industry. Particularly the signing of the Compact by major UK defined contribution (DC) investors to commit 5pc of their portfolios to investing in unlisted equities.

There are questions from some quarters about whether UK DC schemes could, or even should, be investing in unlisted equities.

As a signatory to the Compact, our view is simple – we don’t want Nest members missing out on an asset class which is so highly sought after.

There’s a good reason private equity features in large pension schemes around the world. Average historic returns in private equity, broadly speaking, have been significantly higher than for listed equity over most time horizons.

At Nest, we’ve considered a wide range of factors and data to support our decision to invest in private equity because clearly, if we can achieve at least the average return, this will enhance the scheme’s total returns.

We’ve focused on growth-stage firms, as well as small and mid-cap buyouts, as these are the areas which we believe will deliver the highest risk-adjusted returns.

Since 2022, when we started investing in private equity, we’ve put money into a range of companies across industries.

One example is Captain D’s, a chain of seafood restaurants bringing a soul food take on the British classic of fish and chips for its American culinary audience. It’s been operating for 50 years but last year looked for further investment to help continue expanding its business.

Another deal Nest entered is in Sekhmet, the Indian pharmaceutical company, which is one of the world’s largest suppliers of generic drugs. Both very different companies, but both exciting investment opportunities.

Private equity assets bring an attractive combination of less volatile valuations and higher expected returns than their liquid counterparts. This combination is naturally desirable for any long-term, institutional investor.

We’ve also used our size and scale to negotiate great deals. As a point of principle, we don’t pay performance fees and all investment fits within our existing fee structure. This competitive fee structure also increases the probability that any net investment returns will meet our objectives.

The only difference our members should notice, now we’re investing their money into unlisted equities, are better risk-adjusted returns over the long term.

That’s why the debate of whether DC schemes should be investing in unlisted equities is somewhat over, or should be, provided those schemes have the scale and expertise to access good deals. The path ahead for growing UK DC pension schemes includes illiquids.

The conversation should be moving on to how best to include unlisted equities within a portfolio.

Having access to private assets is one thing, but can investment strategies be designed to maximise the benefit passed onto our members? Asset classes like private equity are still more expensive than their public market equivalents and it’s essential to select the right asset managers to ensure we generate value for money.

We think there’s an especially large capacity to invest in these asset classes for our younger members. Those members have much greater ability to hold long-term illiquid assets compared to members approaching retirement, particularly when there are some assets which can be held in portfolios for decades.

That opportunity is not just limited to unlisted equity. We think there are opportunities in other unlisted assets like infrastructure, not just in being hugely exciting investment assets but in how we can use them to connect with our membership.

Imagine telling a 22-year-old, who may be contributing into a pension for the first time, that when they start saving their money could be invested in infrastructure projects, like renewable energy – tangible assets they can see in the countryside around their home or just off the coast – for decades to come.

What a great message we can share with younger savers. That renewable energy will be powering their pension throughout their savings journey. A limitless source of energy making them money, while also increasing in value as we transition to low carbon economies.

Nest has recently updated its investment objectives and approach to strategic asset allocation. Within this is a new approach to better incorporate illiquids into our portfolio. We’ve evolved our investment glide pathway so younger savers have the highest percentage exposure, which then rebalances as they continue to save with Nest.

What does this look like in practice? That in the not-so-distant future, a Nest member 40 years from retirement could have up to 20pc of their pension pot invested in unlisted equities.

We plan to step up our investment into private markets over the coming years, including more money into unlisted equities. With our new investment objectives in place, we feel confident we can create the best outcomes for our 12 million (and growing) members.