Standard Life to launch next generation private markets default strategy

Standard Life is launching Future Opportunities, a new alternative default pension strategy designed to enhance outcomes through exposure to private assets, complementing its £35bn Sustainable Multi Asset default.

Standard Life is preparing to launch a new alternative pension default fund underpinned by a significant allocation to private assets.

Future Opportunities is the latest evolution of Standard Life’s successful Sustainable Multi Asset lifestyle strategy. Its aim is to improve outcomes through the potential for higher future returns offered by diversified access to high quality private assets.

Standard Life has been at the forefront of developments to integrate the opportunity offered by private markets in its pension propositions with its parent, Phoenix Group, and Schroders forming an independent private markets solutions business, Future Growth Capital, to provide access to high-quality private asset opportunities. Phoenix Group was also an original signatory of the Mansion House Compact, and one of 17 leading pension providers who signed the Mansion House Accord, demonstrating a voluntary commitment to investing more of its default pension options in private markets by 2030, provided this supports better outcomes for scheme members.

Future Opportunities will aim to maximise outcomes for pension savers by opening up a previously unavailable asset class with the potential to increase long-term returns. As an additional default option for employers, it will provide a mix of Private Equity, Real Assets, Infrastructure, Private Debt and Venture Capital from Private Markets to deliver added diversification to the other asset classes within the profile which include Listed Equity, UK Property, Fixed Income and Liquid Alternatives.

With an emphasis on the quality of the underlying assets, the allocation to private assets is expected to increase incrementally over time with the potential to reach 25% in line with Standard Life’s current view that this allocation can help maximise net outcomes for members.

Future Opportunities will be further differentiated by Standard Life’s sustainable investment principles and consistent application of Sustainability Improvers™ labelling for underlying listed equity and investment grade credit allocations.

Commenting on the forthcoming launch, Callum Stewart, Head of Investment Proposition Development at Standard Life said: “The introduction of Future Opportunities aims to make investing in private markets mainstream for millions of pension savers. It will provide the potential for better returns and a level of diversification not previously readily available in a pension default fund, while building on the proven blueprint of our Sustainable Multi Asset strategy. It underlines our commitment to improving outcomes for members and our leadership in the provision of private assets, and is a further demonstration of our support for the Mansion House Accord with improving outcomes front and centre of our approach.”

Standard Life will draw on the private market expertise of Future Growth Capital, the first dedicated private markets investment manager established in the UK to support the Mansion House commitments, and to facilitate improved outcomes for pension savers.

Gail Izat, Managing Director of Workplace at Standard Life said: “We have a strong track record of continually developing our proposition to improve outcomes. By accessing private markets through Future Growth Capital, our dedicated investment manager, we can offer more choice to employers and the prospect of higher returns to members, while also cementing our commitment to the Mansion House Accord.”

Cecile Retaureau, Head of Private Markets at Standard Life added: “Private assets play an important role in building diversified portfolios and can deliver enhanced returns. Selecting best-in-class managers across private markets is key to delivering the best outcomes for our Standard Life Customers and we are delighted to be partnering with Future Growth Capital on this initiative.”