The UK’s largest outlined contribution (DC) pension scheme is trying to double its allocation to personal belongings over the approaching years.
Nest, a £36bn office pension fund, at the moment allocates nearly 15 per cent of its portfolio to personal belongings.
Stephen O’Neill, head of personal markets at Nest, instructed Reuters that the scheme sees progress alternatives in personal credit score, infrastructure and sustainable belongings.
Learn extra: New long-term funds set to democratise personal credit score
The plan is to deliver Nest’s publicity to personal belongings to “in direction of 30 per cent” within the subsequent few years, Neill mentioned.
Nest is prone to make investments as much as £600m in world timberland this yr, with annual returns anticipated to vary from six per cent to greater than 10 per cent, he instructed Reuters.
Pension funds are more and more personal, illiquid belongings to supply larger returns and variety away from risky public markets.
“Whereas greater pension schemes had been already transferring to illiquid belongings, the LTAF construction makes it simpler,” mentioned Joe Dabrowski, deputy director – coverage on the Pensions and Lifetime Financial savings Affiliation.
“It’s a package deal you should purchase off the shelf. It creates extra choices, because it’s a wrapper accepted by the FCA that may work with platforms.”
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