Standard Life has unveiled details of its new private assets default strategy, which aims to launch in the first quarter of next year.
This ‘Future Opportunities’ default will run alongside its existing £35bn Sustainable Multi Asset (SMA) strategy, and is looking to build a 25 per cent allocation to private markets over time.
This default will invest in private equity, real assets, infrastructure, private debt and venture capital, alongside holdings in listed equity, UK property, fixed income and liquid alternatives.
Standard Life’s parent company Phoenix Group has partnered with Schroders to form an independent private markets solutions business, Future Growth Capital, which will source and manage private asset investments for this new default strategy.
Standard Life said the emphasis would be on accessing high quality investment opportunities across the private markets space, offering increased diversification and an opportunity to deliver better net outcomes for members over the longer term.
In addition, Standard Life said this default will adhere to the same sustainable investment principles applied to its SMA strategy. It said there will be a consistent application of the sustainability improvers labelling for the underlying listed equity and investment grade credit allocations.
This new default option will be available to all workplace employers and scheme members. But this will be a ‘twin track’ approach, with SMA remaining the main default. In terms of pricing, Standard Life said it plans to gradually increase the price of this new default in line with the increased allocation to private assets. The other assets classes within this default will be priced similarly to SMA. Further details of pricing will be announced ahead of its launch next year.
Standard Life is been one of the signatories to the Mansion House Compact and said this new default was in line with its commitments under the terms of this agreement. Providers pledged to invest at least 10 per cent of their default funds into private markets by 2030, with at least half of this in the UK.
Standard LIfe’s head of investment proposition development Callum Stewart says: “The introduction of Future Opportunities aims to make investing in private markets mainstream for millions of pension savers.
“It will provide the potential for better returns and a level of diversification not previously readily available in a pension default fund, while building on the proven blueprint of our Sustainable Multi Asset strategy. It underlines our commitment to improving outcomes for members and our leadership in the provision of private assets, and is a further demonstration of our support for the Mansion House Accord with improving outcomes front and centre of our approach.”
Standard Life managing director of workplace Gail Izat adds: “We have a strong track record of continually developing our proposition to improve outcomes. By accessing private markets through Future Growth Capital, our dedicated investment manager, we can offer more choice to employers and the prospect of higher returns to members, while also cementing our commitment to the Mansion House Accord.”
Standard Life head of private markets Cecile Retaureau, adds: “Private assets play an important role in building diversified portfolios and can deliver enhanced returns. Selecting best-in-class managers across private markets is key to delivering the best outcomes for our Standard Life Customers and we are delighted to be partnering with Future Growth Capital on this initiative.”
