India is considering reforms to its approximately $180bn National Pension System that would allow pension fund managers to increase allocations to private markets, alternative assets and lower-rated corporate debt, according to a report by Bloomberg.
A committee established by the Pension Fund Regulatory and Development Authority is reportedly reviewing existing investment restrictions, with proposals including a dedicated allocation category for alternative assets and permission to invest in unlisted equities.
The reforms could significantly expand the pool of domestic institutional capital available to private equity and private credit managers, while allowing pension funds to diversify beyond highly rated bonds and large-cap listed equities. Other proposals would reportedly expand the eligible listed equity universe from 250 to as many as 500 companies by market capitalisation.
The committee is reportedly also considering standardised performance benchmarks and revised risk management requirements. Its recommendations remain subject to regulatory approval, with the changes potentially opening new opportunities for domestic and international alternative asset managers seeking access to India’s growing retirement savings market.
