One DB and one DC scheme announce £100m and £48m private markets mandates
Pension schemes’ push to invest more in private markets continues, as two UK pension schemes – one defined benefit (DB) and one defined contribution (DC) have today announced new allocations.
The defined contribution (DC) section of the Schroders Retirement Benefits Scheme (SRBS) will allocate 20% of its default fund - £48m – to Schroders’ Capital Climate + Long Term Asset Fund (LTAF).
The LTAF seeks to achieve positive returns while also contributing positively to climate change and the net zero transition. It focuses on four long-term themes: climate mitigation, climate adaptation, biodiversity/natural capital and social vulnerabilities.
Assets are invested across infrastructure, real estate, private equity, natural capital and biodiversity, through Schroders and externally managed funds.
Lisa Mundy, SRBS’ chair of trustees commented: “A review of our default investment strategy found that our members would gain valuable diversification benefits through an allocation to private markets.
“We believe the addition of Climate+ supports the Trustee’s objective of enhancing overall returns compared to our previous default investment strategy, thereby improving retirement outcomes for our members. It also supports the Trustee’s stewardship objectives in relation to climate change and sustainable investment.”
DB scheme allocates £100m to private markets
Meanwhile, a DB scheme (which has chosen to stay anonymous) has appointed Van Lanschot Kempen Investment Management to deliver a bespoke £100m private markets mandate.
The strategy will be invested in a customised portfolio of private equity and infrastructure, with a long-term focus. The fact it is bespoke will allow the scheme to have more control, a greater focus on ESG, and a tight view of costs.
Nikesh Patel, managing director, head of client solutions UK at Van Lanschot Kempen, commented: “This mandate reflects a growing demand for more bespoke, cost-efficient access to private markets. We believe solutions of this kind can be transformative for institutions that were previously constrained by allocation amount, enabling investors of all sizes to access and benefit from the opportunities private markets have to offer.”
