Feature – Private markets


PRIVATE MARKETS: ILLIQUID DREAMS


Illiquids offer the potential for better long-term outcomes but is updated regulation sufficient to accommodate change and how is the industry responding? Gill Wadsworth reports.


Defined contribution (DC) pension savers could have made an extra 2% last year if they had been invested in illiquid assets. Yet these sources of additional return rarely feature in the default strategies offered to members. Consultancy Hymans Robertson’s Master Trust Default Fund Review published in May found that historically, average returns from illiquid investment strategies “would have improved net returns for members by 1% to 2% per year over the last decade, assuming a well-diversified approach”.


46 | portfolio institutional | July-August 2023 | Issue 125


The findings provide well-timed fuel for the government’s effort to drive more investment in long-term assets that sup- port its levelling up agenda. The government sees pension funds as critical in providing the billions of pounds in investment needed to bolster the UK’s infrastructure, housing and green energy projects, yet the DC universe – set to be worth £1trn by the end of the decade – remains hamstrung by daily pricing requirements, cost con- straints and governance burdens.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52