In the last episode of series five of The Professional Investment Podcast, Martyn James, director of investments at now: pensions discusses how master trusts are taking over the defined contribution market.
We talk about the pressure the UK government is putting pension scheme providers under to consolidate and how Mercer’s acquisition of Cardano and now: pensions has given the smaller master trust greater scale.
We unpack how the two master trusts have developed LTAFs to enable each scheme to allocation to private equity and infrastructure investments to meet their Mansion House commitments eventually expanding the private asset to around 10% of total portfolios.
Using Australian superannuation schemes as an example, the UK can expect consolidation to dominate the next decade and pension provider jostle to gain market share. But once this has been achieved, the investment opportunities will be much broader.
With the LTAFs in place, Martyn explains how he is excited to see how these private equity and infrastructure investments will be filled. Over the longer other investments such as natural capital can also be explored.
Finally Martyn talks about the member benefits these investments will bring not just in terms of the long-term wealth they can create but also improving the social infrastructure including providing affordable housing.
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