Standard Life is set to launch a “next generation” alternative pension default fund, offering pension savers significant exposure to private assets.
The pension provider said the new fund ‘Future Opportunities’ was designed to maximise member outcomes by opening up a previously unavailable asset class with the potential to increase long-term returns and will complement its flagship £35 billion Sustainable Multi Asset default strategy.
The new fund will provide a mix of private equity, real assets, infrastructure, private debt and venture capital from private markets to deliver added diversification to the other asset classes within the profile, including listed equity, UK property, fixed income and liquid alternatives.
The allocation to private assets is expected to increase incrementally over time with the potential to reach 25% in line with Standard Life’s current view that this allocation can help maximise net outcomes for members.
Standard Life said the fund would be further differentiated by its sustainable investment principles and the application of “sustainability improvers” labelling for underlying listed equity and investment grade credit allocations.
Callum Stewart, head of investment proposition development at Standard Life, said: “The introduction of Future Opportunities aims to make investing in private markets mainstream for millions of pension savers.
“It will provide the potential for better returns and a level of diversification not previously readily available in a pension default fund, while building on the proven blueprint of our Sustainable Multi Asset strategy. It underlines our commitment to improving outcomes for members and our leadership in the provision of private assets.”
Standard Life will draw on the private market expertise of Future Growth Capital, the first dedicated private markets investment manager established in the UK to support the Mansion House commitments and to facilitate improved outcomes for pension savers.
Cecile Retaureau, head of private markets at Standard Life, added: “Private assets play an important role in building diversified portfolios and can deliver enhanced returns. Selecting best-in-class managers across private markets is key to delivering the best outcomes for our Standard Life customers and we are delighted to be partnering with Future Growth Capital on this initiative.”
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