Nest partners with Schroders Capital to invest in private equity

Nest has confirmed its appointment of Schroders Capital to help its savers invest in private equity.

Schroders Capital, part of the Schroders Group, has already begun sourcing investment opportunities for Nest.

The fund manager will focus on growth and middle market deals with the goal of expanding the business and its profitability.

The private equity investments will be included in Nest’s existing default ‘Retirement Date’ funds and Nest’s members will have access to them within the existing charge structure.

Nest estimated it will have at least £1.5bn invested in private equity by early 2025, depending in part on the right deals being available, with the longer-term target to have around 5 per cent of Nest’s portfolio invested in private equity.

The scheme launched the private equity procurement in August 2021, with 14 fund managers applying.

Nest chief investment officer, Mark Fawcett, commented: “Many UK workers, for the first time in their lives, will now have the chance to benefit from investing in private equity.

“We’ve never accepted that any type of investment is out-of-reach for our members. We want every tool in our toolbox to boost the risk-adjusted returns for our members.

“At Nest we’ve developed a sophisticated investment strategy to help navigate changing market conditions, for when markets are buoyant and, more importantly, for when they’re not. Our move into private equity is just the latest evolution and has the potential to drive strong returns for our members, putting them in a better position for retirement.

“I want to thank Schroders Capital for their innovation and commitment to open up private equity for the average saver. They have huge amounts of experience and expertise co-investing on these types of deals and their global scope opens up exciting opportunities.”

Schroders Capital head of private equity investments, Tim Creed, added: “In the past, private assets – like private equity – have been accessible only to large defined benefit pension schemes. But today’s announcement is further evidence that this is changing.

“A huge pool of UK pension savers will now be able to access this asset class through Nest’s scheme and benefit from Schroders Capital’s long-standing investment expertise and history of strong performance.

“We are excited to be at the forefront of this evolution as the democratisation of this asset class gathers pace. Our focus is committed to identifying and delivering investment performance in the growth and middle market space and helping secure the retirement futures of UK savers.”

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