Game-changing moment

Gill Wadsworth investigated the confirmed plans from the UK government for including so-called defined contribution (DC) mega funds in the long-awaited Pensions Scheme Bill, which is set to shake up the investment industry.

Liz Kendall, Work and Pensions Secretary, says the proposed legislation will “transform the GBP2 trillion pensions landscape to ensure savers get good returns for each pound they save, and drive investment into the economy”.

Jos Vermeulen, Head of Solution Design at Insight Investment, calls the proposals a game-changer not just for sponsors and the economy, but also for the gilt market.

“For the UK, the boost for corporates and members should be a clear positive for jobs and growth. It also means DB schemes are more likely to run on for the long term, avoiding gilt sales approaching half a trillion pounds or more due to buy-outs. The government can also expect to realise up to GBP40 billion in tax revenues.”

We also brought you the Private Markets Survey Report from State Street Corporation, “The New Private Markets Advantage”, which found that, among the key takeaways, institutional investors are anticipating a significant uptick in retail allocations to private markets in the next two years, with retail investors set to become the main source of private market fundraising in this period.

Donna Milrod, chief product officer and head of Digital Asset Solutions at State Street, commented: “The democratisation of private markets is a trend that has been underway for a number of years; however, 2025 has the potential to be a watershed year for retail allocations to private markets. Distribution to wealth channels and retail fund flows could become the dominant contributor to future fundraising. Against this backdrop, we are pleased to see respondents recognising the critical role that innovative fund products and structures are playing in fuelling and enhancing this trend as distribution broadens from institutional to mass affluent to retail over the coming years.”

Our In My Opinion this week comes from Payden & Rygel, with Kristin Ceva writing that the outlook for the next year is positive, overall. “In a context where growth in the developed world may struggle to exceed 1.5-2 per cent, EM countries, in aggregate, are expected to expand at a rate of 4 per cent or more. Inflation rates in EM economies have normalised, and most EM central banks have room to lower policy rates.”

I will be chairing some of the ETF panels at IMPower Fund Forum in June. For a 10 per cent discount to attend, use this link and code: FKN3972ETFX. I hope to see you there.

Beverly Chandler, Managing Editor, Institutional Asset Manager

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