Pensions and retirement savings provider Standard Life has launched a new pension default known as Future Opportunities which has a significant focus on private markets.
The company said the default will help drive better member outcomes by embracing private markets.
It is available for selection as a default by new and existing business across trust-based products including DC Master Trust and own trust.
The company said the default is the latest evolution of its Sustainable Multi Asset strategy and will provide scheme members with opportunities that have previously only been available to professional investors.
It believes that a long‑term private markets allocation of around 25% has the potential to enhance returns and improve diversification for customers
To enable its private markets’ strategy, Standard Life said it has incorporated significant oversight to closely monitor the solution, embedding a series of reviews across strategic asset allocation; asset quality, considered pace of deployment and impact on net member outcomes, and fee transparency via a clearly defined performance fee model.
Alasdair Birrell, workplace investment development lead at Standard Life said that private market investing is becoming a key component in the evolution of pension saving in the UK.
He said: “Though currently unfamiliar to employers and DC members, we anticipate strong demand among those seeking the potential for better returns and added diversification.
“It’s going to be a multi-year journey, and we’ll grow the allocation gradually and prudently to ensure outcomes are always prioritised, while continually building trust and familiarity in private assets among our clients and members.”
He said that under a variable charging structure members only pay for the private allocation they have “and not the one we're targeting long term.”