Nest issued an invitation to tender for fund managers today, 4 September, to support the evolution of its investment strategy.
The company believes that, after extensive research and with some innovation, its members should be able to benefit from the higher returns available with DC pension schemes.
Nest chief investment officer, Mark Fawcett said: “We see long term potential in private markets and alternative asset classes. 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 DC schemes. Our members should have access to the same opportunities as pension savers in large, sophisticated DB schemes.”
They are challenging others in the industry to invent appropriate solutions and deliver them at an affordable price for the next generation of DC members.
Current investment models are unlikely to meet Nest’s requirements and their new scheme is looking for fund managers that can operate evergreen, scalable funds focusing on unlisted infrastructure debt, real estate debt and corporate loans.
Fawcett continued: “DC pension savings are soon going to dominate the market and fund managers are beginning to recognise this. We’re looking to work with innovative fund managers who see the future potential in this market and want constructive, long term relationships with their clients based on pension savers’ best interests.”
In the future, Nest will have enough assets under its management to explore direct and co-investment opportunities, and wants to develop its in-house expertise in that area.