Private Markets: What are they and what does it mean for my pension?

Saving into a pension means your money is invested with the aim of helping it to grow over time, giving you money to spend in your retirement.

Investments can be managed in different ways, with varying levels of risk and potential for returns that can be adjusted depending on your needs and preferences. In your Smart Pension account you can choose to have us manage your investments for you or to manage them yourself. 

Savings can be invested in many different areas including stocks, bonds, commodities and infrastructure. You can read more about these and investing in general in our investments guide.

UK pension providers like Smart Pension have a duty to ensure savers are achieving good returns on their investments. With the recent government focus on pension adequacy, ensuring people have enough money to live on in retirement, the private markets investment sector, in particular, has grown as a means of addressing this.

Private markets explained‍

At Smart Pension, we’re committed to investing in private markets in our default fund, where the majority of our members invest their savings. This involves funding businesses and projects that aren’t traded on public exchanges. ‍

Examples of these can include: 

• renewable energy projects - such as wind and solar aiming to help build a more sustainable future
• infrastructure - like improved EV charging networks, heat pumps and grid enhancements
• fast-growing businesses - typically in sectors like technology, agriculture and research, fuelling the creation of smart cities and the circular economy

‍Why do private markets matter for your pension?‍

Investing in private markets offers several key benefits for your pension savings:

• Potential for stronger returns
  Private markets have the potential to deliver more stable long-term returns compared to other publicly traded assets
• Reduced market volatility
  They are often less affected by short-term market volatility, offering more consistent growth for your savings over the long term. Find out more about market volatility here
• Access to high-growth opportunities
  We can invest in dynamic businesses with significant potential for growth, not accessible through other forms of investing

Investing in the UK’s future
Some of the projects and businesses funded by private markets could have a direct positive impact on you and your local community

Our commitment to purposeful investing

At Smart Pension, we believe in investing with purpose. That's why we'll be allocating 15% of our default fund to private market investments. In partnership with some of the top investment managers across private credit, private equity (including venture capital) and infrastructure.

Our advanced technology allows us to invest flexibly and efficiently, setting us apart from more traditional providers. Through the impact of our private markets investments, we're helping to build a stronger UK economy and a better future for you and for generations to come.

Find out more: www.smartpension.co.uk/investments

About Smart Pension

Launched in 2015, Smart Pension now exceeds £10bn in Assets Under Management (AUM) and serves over 2 million members and 100,000 employers. It is powered by Keystone, Smart’s global savings and investments technology platform.

Aquiline, Barclays, Chrysalis Investments, DWS Group, Fidelity InternationalStrategic Ventures, J.P. Morgan, Legal & General Investment Management, MUFG and Natixis Investment Managers are all investors in Smart Pension.