Sofia reflects on 17 of the UK’s largest defined contribution (DC) pension providers committing to allocating at least 10% of their default funds to private markets by 2030, with at least 5% allocated to the UK. We discuss the implications of this commitment to improve member returns by diversifying portfolios and how this might help the UK economy.
We explain why UK pension schemes are only now allocating to private assets and discuss the practical challenges. She offers a trustee’s perspective on how real estate, infrastructure, private debt and equity could be integrated into the default fund depending on where a member is on their retirement journey.
We also examine how Long-Term Asset Funds (LTAFs) could provide an accessible route into private markets, particularly for small and mid-sized schemes. We examine whether schemes should consider one LTAF provider for all asset classes or pick a selection of best-in-class.
Other topics discussed include:
• The structural barriers that have historically prevented DC schemes from accessing private markets
• The importance of scale and fee negotiation in ensuring members get value from these investments
• How different private assets can support both wealth accumulation and decumulation phases
• The urgent need to raise pension contribution rates in the UK, currently lagging behind countries like Canada and Australia
Looking ahead to 2030, Sofia hopes private markets will be a mainstream part of the UK pension landscape which deliver stronger member outcomes and tangible benefits to the national economy.
This is a valuable listen for trustees, fund managers, policymakers, and anyone seeking to understand the evolving world of long-term pension investment in the UK.
Watch or listen now
