Nest has partnered with BlackRock and will use its Aladdin platform to manage the risk of its investment strategy.
This platform will allow Nest to monitor more than 3,000 risk factors across fixed income, equity, foreign exchange and private markets, and also quantify the financial impact of climate-related risks.
Nest said the ability to manage the risk of its entire investment strategy across both public and private markets on a single platform will help it build a more resilient portfolio and enhance its capability to undertake more sophisticated risk analysis.
Nest’s head of market risk and asset allocation Jiwei Dong says: “The complexities facing a sophisticated portfolio like Nest’s are significant. It’s crucial we upgrade our services in line with our projected growth to be a £100bn scheme by the end of the decade.
“Just in the past few years, we’ve expanded our investable universe to include more illiquid assets while also adopting more complicated public market investment strategies. Aladdin allows us to get a holistic view on risk profiles of our multi-asset portfolios, and fully integrate ESG factors within our risk management process, matching the level of complexity we need.”
BlackRock head of UK Sarah Melvin, Head of UK, BlackRock adds: “Nest plays a crucial role in supporting over 12 million people in the UK saving for their retirement. We share a joint purpose of helping more and more people experience financial well-being, so are delighted to be deepening our long-standing partnership.
“We are proud to have been chosen by Nest to provide enhanced analytics through Aladdin’s Investment Risk and Aladdin Climate platforms, which will in turn help them to serve their members better.”
Nest is the largest DC master trust in the UK in terms of the number of members.