The UK’s state-backed workplace pension scheme Nest is investing £450m into US private credit, continuing its expansion into private markets even as parts of the asset class face growing investor caution over credit quality and liquidity, according to a report by the Financial Times.
The investment will be deployed through specialist manager Crescent Capital, which oversees around $50bn in assets. It forms part of Nest’s broader plan to significantly scale its exposure to private markets, including credit, infrastructure, and property.
Nest aims to increase its allocation to private markets from around 18% currently to 30% by 2030, lifting total private asset exposure from roughly £11bn to £30bn over the next four years. The scheme already manages about £60bn in assets for more than 13 million members and receives approximately £600m in monthly contributions.
Established by the UK government to support workplace pension auto-enrolment, Nest has increasingly positioned itself as a long-term investor in illiquid assets and has supported policy efforts to channel more capital into infrastructure and private investment.
Its target allocation to private markets is notably higher than most peers. Industry estimates suggest defined contribution pension schemes typically allocate closer to 10% to private assets, while even large Australian superannuation funds generally remain below Nest’s 30% target.
The move comes at a time when private credit markets have experienced significant outflows, with investors withdrawing funds amid concerns over underwriting standards and exposure to vulnerable borrowers. Some major managers, including Blue Owl, Ares and Apollo, have faced redemption pressure, while wealth investors pulled tens of billions from private credit strategies earlier this year, according to estimates.
Despite these headwinds, Nest is proceeding with a multi-year mandate focused on senior secured loans to US private companies, structured as an evergreen strategy designed to provide ongoing deployment flexibility.
The decision highlights a broader divergence in investor behaviour, with some institutions pulling back from private credit while large, long-term pension pools continue to increase allocations to the asset class.
