This paper seeks to offer a perspective from two practitioners on how the potential for retirement fund collaboration to improve long-term market returns could be realised. After looking at the Universal Owner hypothesis and long-term market returns, and their relevance to pension funds, the paper looks at collaboration to date, and the problems of collective action in general. After outlining several current collaborative opportunities, the ways in which they address the problems of collective action are outlined. The paper ends with a call to action to the leaders of the world's largest pension funds. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

As significant long-term domestic investors, South Africa‟s largest public sector pension funds have an interest in helping South Africa move onto a sustainable development path. However, this paper tentatively concludes that, although there is a possible collective developmental role for these funds, this is unlikely to occur unless leadership from government or the funds emerges. If a leadership role is chosen, government should probably focus on a transition management approach to sustainable development, trustees on the implementation of long-term investment policies, and the members of the investment community on a high leverage initiative, possibly linked to the Financial Sector Charter review. Some of the tentative conclusions reached in this paper also provide pointers for overseas pension funds and their stakeholders. Firstly, governments could support collective action between the largest public sector pension funds globally, and in return develop an unusually powerful long-term voice in support of a transition to sustainability. Secondly, a more significant role for these funds will highlight the issue of prioritisation, and the development of legitimate processes is likely to be needed. Thirdly, full implementation of genuinely long-term investment policies will probably lead to significant changes in the role funds play in the investment industry, possibly including the establishment of their own investment co-operatives.