UK pension schemes could increase allocations to private markets if policymakers focused on improving the availability of investable opportunities rather than imposing allocation targets, according to a report by Pensions Age.
Ruston Smith, chair of the Pensions Management Institute (PMI), wrote in his blog that stronger connections between institutional capital and investment opportunities could encourage greater pension investment in infrastructure, real assets and private companies.
Smith argued that the UK should prioritise developing a pipeline of commercially attractive projects, supported by effective governance, operational capabilities and investment advice.
He highlighted the City of London Corporation’s recently launched InvestConnect platform as a potential mechanism for connecting pension investors with suitable private markets opportunities.
The initiative aims to improve access to investment projects and help institutional investors identify opportunities aligned with their long-term objectives.
Smith said pension allocations to private markets should be driven by investment fundamentals rather than government targets, with schemes assessing opportunities according to their own governance capabilities, scale and return requirements.
He also emphasised 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.
