As public spending ramps up to stimulate economic growth, focus is shifting toward other strategic levers. One standout option? Increasing institutional investment in private markets via pension funds.
This move could have significant ripple effects, creating exciting opportunities in the retail market — from expanded advisory prospects to greater diversification for clients.
A Changing Landscape in Pension Fund Allocation
UK pension funds have undergone a notable transformation over the years, gradually moving away from domestic assets in pursuit of potentially higher returns from international investments.
As of 2024, only 4.4% of UK pension assets were allocated to UK equities, with similarly low exposure to private markets. This limited domestic investment is contributing to a shortfall in growth capital for British businesses — especially those at the scale-up stage.
Against this backdrop, interest in private markets is accelerating. A key question is emerging: could pension schemes play a larger role in supporting the growth of UK businesses?
