The announcement that Legal & General, AustralianSuper and Nest will collectively invest £3bn in UK private markets is a welcome sign of renewed confidence in Britain’s long-term growth strategy. The focus on infrastructure, housing and high-growth companies reflects the structural need for long-duration capital to power the real economy. Yet beneath this positive news lies a critical problem that, if not addressed soon, could turn this investment wave from a success into a failure.
As pension funds expand their exposure to private assets, the complexity of monitoring performance, valuation and risk grows exponentially. Unlike public equities and bonds, private markets are still characterised by scattered data, inconsistent reporting and opaque valuation practices. A typical pension scheme may manage infrastructure projects, private equity funds and property holdings alongside traditional securities, each governed by different data standards and investment horizons.
This division creates operational blind spots that make it difficult for trustees and regulators to see a consistent picture of performance and risk. For long-term institutional investors who must meet liabilities decades into the future, that lack of transparency is not just inconvenient – it’s dangerous.
In parallel, a growing movement advocates for Defined Benefit (DB) schemes to ‘run on’ rather than de-risk through bulk annuity transactions with insurers. While this approach preserves long-term investment flexibility for schemes, it also benefits asset managers, since insurers that assume DB assets typically manage those portfolios internally. Provided the underlying infrastructure modernizes, this shift could sustain greater institutional allocations to public and private markets provided the underlying infrastructure modernizes.
The solution lies in unified platforms capable of aggregating, analysing and reporting across all asset classes, public and private alike. When data is standardised and accessible, investors can better understand exposures, compare like with like, and make informed decisions based on a complete portfolio view rather than isolated snapshots.
Integrated technology also helps funds meet rising stakeholder expectations. Pension trustees are under pressure to show not only financial returns but also progress on sustainability, social impact and governance. Achieving these goals requires information that is accurate, comparable and timely. This is something spreadsheets and manual reports cannot deliver.
While rising government bond yields have affected pension fund funding levels and risk appetites, not every market shares the UK’s structural dynamics. In some jurisdictions, liability-driven investment strategies differ significantly, moderating the appeal or feasibility of similar ‘run-on’ models. Understanding these nuances is critical for global investors managing diversified portfolios across multiple markets.
As the UK seeks to emulate the Canadian “Maple 8” model through initiatives such as Sterling 20, supporting data infrastructure must evolve alongside capital flows. The world’s most successful pension funds have invested as much in their architecture as their assets. They can slice portfolio data by geography, sector, risk factor or ESG outcome, generating insights that drive accountability and, crucially for pension members, superior performance. Without similar capability, UK funds risk being data-rich but insight-poor — committing billions to assets that are impossible to benchmark.
Another challenge lies within asset managers themselves. Internal teams often remain siloed, with investment, operations and risk groups working from separate systems. Technology can break down these silos, enabling real-time collaboration, consistent data usage and end-to-end transparency. For pension funds increasing their exposure to private markets, evolving their data infrastructure is essential to capture value.
The £3bn announced this week represents more than investment in Britain’s housing and infrastructure. It signals institutional confidence in the country’s future—but that confidence must be underpinned by transparency. To deliver consistent returns, manage risk and maintain public trust, pension investors need to see, in one clear view, how every pound of their portfolio is performing. The next great transformation in pension investment could turbocharge the UK economy – but only if the plumbing underpinning the UK’s £4tn asset owner market keeps pace with its ambitions.
