UK institutional investors responded to last year’s trade, tariff and geopolitical disruption with selective changes rather than wholesale portfolio resets, according to new research.
Figures from Nuveen’s 2026 EQuilibrium Global Institutional Investor Survey showed that 11% of UK investors made significant portfolio changes in response to the disruptions of 2025, the second-highest proportion globally. But the survey also suggests investors did not see the year simply as a source of risk: 73% said 2025 delivered more upside than downside to their portfolios.
The UK data also points to growing caution around the US. According to the study, nearly half of UK investors made their biggest portfolio reduction to the US market, while 42% said they believe the US dollar’s status as the leading global reserve currency will face a meaningful decline over the next 10 years.
What investors are doing
The wider global findings echo the pattern of adjustment rather than retreat. Among institutions making changes in response to disruption, 58% said they were reallocating regional exposures, 49% said they were increasing liquidity, and 26% said they were reducing US dollar exposure.
This also suggests that not all investors are treating the recent trade tensions and geopolitical uncertainty as purely transitory. Instead, many are reassessing long-term assumptions about market leadership. Most reported changes are incremental, reflecting a focus on risk assessment and diversification.
As one UK public pension chief investment officer said in the report: “Diversification still offers the biggest bang for the buck.”
The survey shows investors are putting a premium on flexibility. A Canadian public pension investor explained: “Our focus is to be resilient and liquid; those are the two guiding principles.”
Where the money is going
Private markets remain a clear destination for future capital. Globally, 81% of institutional investors said they plan to increase allocations over the next five years.
Within that, the strongest demand is for private infrastructure, private credit and private equity, with 43% of respondents planning to increase allocations to infrastructure, 43% to private credit, and 42% to private equity over the next two years.
Within private credit, investors also appear to be focusing on how they invest, not just how much. The report found that custom mandates and institutional separate accounts were the most preferred routes for gaining new exposure to private credit, suggesting growing demand for control, alignment and more tailored implementation.
The survey also suggests that investors continue to see private markets as a source of differentiated returns. As a US foundation investment director said in the report: “We think we can earn better risk-adjusted returns in private markets, there’s more inefficiency there.”
Future drivers
Looking further ahead, 63% of investment institutions identified artificial intelligence (AI) as one of the biggest influences on investment strategy, ahead of energy transition on 40%, and deglobalisation or nationalism on 36%.
At the same time, approaches to investing in AI remain selective and uneven. Rather than broad-based repositioning, capital is being directed toward specific enablers, including infrastructure, computing capacity and the energy systems required to support rising demand.
A US insurance investment analyst said: “We’re investing in data centres, chips, and semiconductors. We’re also thinking about the impact on the healthcare sector.”
However, while investors express confidence in AI’s long-term productivity impact, just 12% are allocating away from sectors or businesses they believe will be hurt by AI.
Nuveen concluded: “Taken together, these patterns point to a recalibration in how portfolios are constructed and governed. Rather than signalling a break from established frameworks, the data suggests a more nuanced evolution in decision-making – one shaped by structural change and guided by an emphasis on long-term stability.”
