Nest, a pension provider representing around a third of the UK workforce, has committed a further £500 million to be invested by Schroders Capital’s private markets business. The allocation strengthens the partnership which began in 2022 and brings Nest’s total committed capital “to Schroders Capital’s private equity strategy to £1.5 billion.”
Schroders Capital’s aim is to invest in established and young businesses in growth sectors such “as artificial intelligence, healthcare, pharmaceuticals and technology across North America, Asia and Europe, including the UK.”
A total of £1.5 billion has been committed via the fund managed by Schroders Capital, feeding into Nest’s default ‘Retirement Date’ funds where “the majority of its 13 million members save.”
Nest and Schroders Capital reportedly share the vision that scaling up private market investments can not only enable long-term return potential for members but also support growth in the UK economy.
Across its portfolio, Nest has around £2 billion directly invested in unlisted equity, of which nearly “all is invested through its default funds and around 18% (£381 million) is to UK companies.”
Rachel Farrell, Director of Public and Private Markets at Nest Invest, has praised Schroders Capital in helping Nest’s members “benefit from these types of high-value deals.”
Investors, like Nest, are turning to private markets to access return and income opportunities, as highlighted within Schroders’ Global Investor Insights Survey.
Across public and private markets, private equity was selected as the most favoured asset class for “return opportunities among institutional investors.”
With this, domestically focused companies that are inaccessible via public markets can be less exposed “to global trade disruptions and geopolitical tensions, and therefore, have the potential to also enhance portfolio resilience – a particularly pertinent factor in today’s market context.”
Schroders Capital’s private equity platform has built a network of specialist managers, enabling them to unlock access to growth and value creation opportunities that otherwise “would be unavailable to Nest’s members.”
With a focus on growth in the lower-mid market, Schroders Capital has built a diversified portfolio and invested in 25+ firms across the UK, Europe, North America and Asia.
The combination of Nest’s ability to acquire capital at pace with Schroders Capital’s specialisms has been key to maintaining steady deployment momentum.