The news that Australian fund manager Macquarie would be investing in UK airports provided the spark for this discussion. In a recent trip down under, Jesal talked to supers and asset managers about how they allocate to their own market. This has been a long tradition with up to 60% of assets invested in Australia.
While asset owners could buy both public and private assets, UK public markets have been suffering in recent years with listings falling and performance faltering. This part of a broader market trend which has seen companies prefer private market financing to public flotations.
Jesal unwrapped how DC schemes should approach private market investing, using equity at the start of the members’ wealth journey and switching to debt during retirement. And within equity portfolios, risk needs to further diversified with some allocation to high growth, high risk assets like biotech and lower risk infrastructure equity.
Despite a focus on UK assets, L&G doesn’t constrain its private market assets to the UK but invests globally looking for best-in-class private asset managers to build the best portfolio for scheme members.
This episode is a vital listen for asset managers looking to understand how providers of contracted-out pensions schemes and master trusts are evolving their thinking about private asset allocation.
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