Key Takeaways
- • Ruston Smith, chair of the Pensions Management Institute (PMI), argues that UK pension allocations to private markets are constrained by a shortage of investable opportunities rather than by investor appetite, according to a Pensions Age report.
- • Smith contends that pension allocations should be driven by investment fundamentals rather than government-set allocation targets, with each scheme weighing opportunities against its own governance capabilities, scale and return requirements.
- • Smith points to the City of London Corporation's recently launched InvestConnect platform as a potential mechanism for linking pension investors with private markets opportunities.
- • The commentary lands as the UK government pushes pension funds to direct more capital into domestic private markets, particularly infrastructure and growth businesses.
Summary
UK pension schemes could increase their allocations to private markets if policymakers focus on improving the availability of investable opportunities rather than imposing allocation targets, according to a report by Pensions Age. The argument comes from Ruston Smith, chair of the Pensions Management Institute (PMI), who set out his views in a blog post.
Smith said stronger connections between institutional capital and investment opportunities could encourage greater pension investment in infrastructure, real assets and private companies. In his view, the UK should prioritise building a pipeline of commercially attractive projects, supported by effective governance, operational capabilities and investment advice.
As an example of infrastructure that could help connect investors with opportunities, Smith cited the City of London Corporation's recently launched InvestConnect platform. The initiative aims to improve access to investment projects and help institutional investors identify opportunities aligned with their long-term objectives.
Smith argued that pension allocations to private markets should be driven by investment fundamentals rather than government targets, with schemes assessing opportunities against their own governance capabilities, scale and return requirements. He also stressed the importance of trustee expertise, transparent reporting and long-term decision-making in supporting greater private markets investment.
The comments come as the UK government seeks to encourage pension funds to allocate more capital to domestic private markets, particularly infrastructure and growth businesses.
Smith said stronger connections between institutional capital and investment opportunities could encourage greater pension investment in infrastructure, real assets and private companies. In his view, the UK should prioritise building a pipeline of commercially attractive projects, supported by effective governance, operational capabilities and investment advice.
As an example of infrastructure that could help connect investors with opportunities, Smith cited the City of London Corporation's recently launched InvestConnect platform. The initiative aims to improve access to investment projects and help institutional investors identify opportunities aligned with their long-term objectives.
Smith argued that pension allocations to private markets should be driven by investment fundamentals rather than government targets, with schemes assessing opportunities against their own governance capabilities, scale and return requirements. He also stressed the importance of trustee expertise, transparent reporting and long-term decision-making in supporting greater private markets investment.
The comments come as the UK government seeks to encourage pension funds to allocate more capital to domestic private markets, particularly infrastructure and growth businesses.
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