Nest launches private equity procurement

•    Estimated £1.5bn to be invested in private equity by 2024
•    Nest: “We’ll provide an important source of capital, injecting new money into innovative and growing businesses”

Nest has today launched a new procurement inviting fund managers to provide solutions for investing in private equity.

For the past couple of years Nest has steadily added private market assets into its investable universe, from issuing private credit to mid-sized companies to investing directly into infrastructure projects.

The not-for-profit pension scheme, with 10 million members and managing £20bn AUM, is now seeking innovative ways to start investing into growth and mid-market private equity.

Following a successful procurement, Nest is targeting an allocation of 5% of its AUM to private equity, an estimated £1.5bn by the end of 2024.

Stephen O’Neill, Nest’s Head of Private Markets, said:
“Over the next 20 years we’re expecting to invest around £80 billion on behalf of our members. We want private equity to play an important role in our portfolio, offering strong returns and diversification.

“We’ve had some great conversations with fund managers during our market warming exercise and I’m delighted to now formally launch this procurement.

“As ever, we’re looking for bidders to present global solutions that will be evergreen and scale with Nest over time.

“We’re excited about the positive impact we can have on growing companies. We’ll provide an important source of capital, injecting new money into innovative and growing businesses.”

The focus of this procurement is on accessing growth private equity. Nest wants to support companies which are growing and seeking new capital to help fund that expansion.

In return Nest can benefit from the additional profitable revenue the business generates, and also achieve considerable diversification benefits from this allocation.

This new mandate will be added to the existing range of ‘building blocks’ funds that make up the scheme’s default strategy – the Retirement Date Funds.

Successful fund managers will need to demonstrate they can offer a high quality and evergreen investment processes, a robust risk management framework and integration of environmental, social and governance factors into their investment and asset management processes.

Applications for this tender can be made through the Bravo platform and must be submitted by 5pm, 17th September.