The National Employment Savings Trust (Nest) has announced that its subsidiary, Nest Invest, has been approved as an occupational pension scheme by the Financial Conduct Authority (FCA).

Nest joins the Royal Bank of Scotland’s and BT’s pension schemes in having set up an occupational pension scheme offshoot, which perform investment management tasks on behalf of a trustee or pension scheme.

This will increase Nest’s capability to manage more complex investment decisions and tasks in-house.

For example, its new FCA-regulated subsidiary will be able to provide the scheme’s board with regulated advice regarding new investment opportunities.

Furthermore, it will enable Nest to make active decisions on co-investment opportunities in private markets and direct fund managers to use derivatives to help invest Nest’s cashflows and effectively manage risk.

Nest chief investment officer, Mark Fawcett, said: “Nest is going to be responsible for more than £400m new contributions every month.

"While setting up Nest Invest is an exciting development, it’s the natural next step for a scheme of our size. We already have the internal expertise in Nest’s investment team to manage the additional responsibilities.”

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