A stronger pipeline of investment opportunities, supported by strong governance, operational capacity and effective advice, could help pension schemes increase investment in private markets, according to Pensions Management Institute (PMI) chair, Ruston Smith.

In a blog, Smith argued that policymakers and industry leaders should focus on creating practical routes into private market investments rather than setting uniform allocation targets.

He said better links between pension capital and investment opportunities could help schemes move from making commitments to private markets to deploying capital in areas such as infrastructure, real assets and private companies.

The blog also highlighted the importance of trustee capability, high-quality reporting and long-term decision making when assessing private market investments.

Smith pointed to the recently launched InvestConnect platform, led by the City of London Corporation, as a potentially important development in helping institutional investors identify suitable opportunities.

He said this had the potential to be the “UK’s shop window” of investable opportunities.

He also backed comments earlier this year from the current Lady Mayor of the City of London, Dame Susan Langley, for stronger connections between available capital and projects that can drive economic growth.

"The UK doesn't have a pension capital problem. It has an investability problem,” Smith wrote in his blog.

“Private markets should not, and need not, be a policy lever to be pulled.

“Appropriate, attractive investable UK private market opportunities should be a natural part of long-term pension fund allocations – and is particularly relevant to trustee boards of schemes with the appropriate skill, experience and scale.”

He added that the City of London Corporation’s InvestConnect has the “real potential to act as a critical catalyst” in connecting opportunity to institutional investment.

“Get the plumbing right, and it will facilitate more efficient access to investment, improving outcomes for savers and supporting a more productive UK economy,” he concluded.

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