Mikulskis: It is critical the wider investment community, with support of the government, provide a dependable pipeline of investable opportunities
The People’s Pension (TPP) is set to start investing a “significant proportion” of its £31bn assets into private markets later this year – with a target to grow its allocation to £4bn by 2030.
The master trust – provided by People's Partnership – said it was preparing to take its first steps into private market investment in the coming months with the imminent appointment of a private markets specialist and creation of a research capability.
This latest announcement follows the scheme's statement last year that it had reached the scale to deploy meaningfully into private markets and would look to move in this direction in the future.
TPP said it was expected that the trustees of the scheme would target allocating up to 10% of growth pool assets – or £4bn – by 2030, initially in assets such as infrastructure and real estate.
The scheme said this allocation would be dependent on it being able to access a "dependable pipeline" of good quality investable assets that meet its return requirements at a fee level that leaves the benefits in the hands of members, and with the right operational structures in place.
It added a "substantial part" of this new allocation of assets could be deployed in the UK if assets are available that meet its return requirements – noting the scheme already invests some 14% of its members' savings in UK-based assets within its growth stage default fund.
TPP is not currently a signatory of the voluntary Mansion House Compact – the initiative launched last year committing schemes to allocate at least 5% of their default funds to unlisted equities by 2030 – but said it was speaking to the City of London Corporation about the compact's plans going forwards and how this might align with People's Partnership.
TPP trustee chair Mark Condron said: "What we are announcing today is a significant step forward on the path towards TPP investing in private markets, including key parts of the UK economy.
"We are demonstrating how a responsible asset owner, operating at the right scale, can invest in both the best interests of its members and to the benefit of the wider economy in which they work."
TPP chief investment officer Dan Mikulskis added: "As one of the fastest growing asset owners in the UK, our in-house investment expertise has grown significantly over the last 12 months and this journey will continue with the imminent appointment of a private markets' specialist, broadening our investment reach.
"In order for us to invest in private markets over this period it's critical that the wider investment community, with support of the government, provide a dependable pipeline of investable opportunities which deliver good value for our 6.8 million savers."
People's Partnership chief executive Patrick Heath-Lay continued: "We're at a pivotal time for UK pensions with the government indicating a direction of travel toward scale and value for savers. As an independent £31bn master trust, without shareholders, we believe that now is the time to increase our investment in private assets for the benefit of our savers and the growth of the UK economy. TPP has a vital role to play in this exciting plan for the future of UK retirement savings."
Chancellor Rachel Reeves also commented on TPP's announcement. She said: "Growing the economy is the number one mission of the government. This public commitment from one of the UK's largest independent pension master trusts to invest here, at home in Britain, will help drive economic growth and support our milestone of improving living standards across the UK."
TPP currently has around £31bn of assets and some 6.1 million members. Its ambitions for private market allocations are based on projections that its total assets under management will reach around £60bn in 2030.
