Government-backed workplace pension provider Nest is looking to add private credit to its portfolio in a bid to enhance its investment returns.
Nest has launched a search for a firm to manage unlisted infrastructure debt, real estate debt and corporate loan strategies. The pensions provider is open to this taking the form of a multi-asset fund.
Nest’s chief investment officer, Mark Fawcett, said that he and his colleagues understand the long-term potential that private markets and alternative assets hold. “We’ve recently added commodities and are now looking to add private credit to our toolbox.
“We don’t buy the argument that private credit is out of reach for defined contribution schemes,” he added. “Our members should have access to the same opportunities as pension savers in large, sophisticated defined benefit schemes.”
The effects of auto enrolment have been most tangible for Nest which has a public service obligation to accept any employer, whatever their size, who wants to use the scheme to offer their employees a pension.
This has helped Nest’s membership to leap to 6.4 million from 4.5 million in the past year, increasing its assets under management by £1bn to £2.7bn.
The deadline for submissions for the tender is 8 October.
