The HSBC Bank (UK) Pension Scheme has announced plans to incorporate private markets into its defined contribution (DC) default investment strategies, partnering with Fulcrum Asset Management to create a multi-asset private markets Long-Term Asset Fund (LTAF).

The allocation to the LTAF, which has now received regulatory approval, is being made in the context of the trustee’s wider changes to the DC default investment strategies with the aim of accessing a broader range of more sophisticated and diversifying investment opportunities.

In doing so, the trustee, advised by LCP, is looking to improve the outlook for members by targeting a higher expected risk adjusted investment return for those with DC benefits within the scheme.

Commenting on the commitment, HSBC Bank (UK) Pension Scheme trustee board, Russell Picot, stated: “Improving expected member outcomes by targeting better risk adjusted returns through diversifying the assets in which members’ savings are invested have been at the heart of the HSBC Scheme.

“I’m delighted for our scheme to take this step for our DC members and to drive positive change within the pensions industry.”

Adding to this, LCP partner and head of DC, Laura Myers, stated: “The HSBC Scheme’s investment in private markets is an important step for the DC industry.

"We’re proud to have been part of this project leading the way for single trust schemes with an innovative bespoke solution designed to enable members to benefit from investment in illiquid assets.

"The successful launch of the largest LTAF for a single trust scheme and incorporating it into the investment strategies demonstrates the dedication of the trustee and pension scheme e
executive team to driving innovation with the aim of improving member outcomes.

Fulcrum partner and head of alternative solutions, Matthew Roberts, added: "It is an honour to be appointed for this mandate by the trustee.

"The strategy provides access to a panel of illiquid investment specialists, which combine to form a bespoke, diversified and flexible solution for the HSBC Scheme to deliver better expected outcomes for the Scheme’s DC members.

Key partners on the project also included Waystone as authorised corporate director and Northern Trust as depositary, administration and transfer agency.

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