UK’s Nest pension scheme to invest in private credit

Retirement_fundNest, the UK pension scheme managing investments for several million auto-enrolled members, has appointed BNP Paribas Asset Management (BNPP AM) to manage a diversified private credit portfolio.

The asset manager is to create an open-ended diversified private credit fund, initially consisting of exposure to infrastructure debt, commercial real estate debt, European mid-market loans, UK small and medium-sized enterprises loans, and US mid-market loans.

Nest is a defined contribution (DC) workplace pension scheme created as part of the UK government’s 2008 workplace pensions reforms to facilitate auto-enrolment and has £7.5 billion of assets.

Mark Fawcett, chief investment officer of Nest, said: “Nest’s move into private credit is an important step in developing our investment strategy and helping to deliver the strong risk-adjusted returns we want for our members.”

BNPP AM said the mandate would be a collaboration between BNP Paribas’ corporate and institutional banking’s US leveraged finance group, BNPP AM’s multi-asset, quantitative and solutions unit, and the private debt and real assets division. 

Guy Davies, UK chief executive of BNPP AM, said: “This mandate … will enable Nest’s individual DC members to access private markets that can offer lower volatility and enhanced returns relative to their public market equivalents.”

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