National Employment Savings Trust, London, is seeking managers to develop a private credit strategy.
The £3.8 billion ($4.9 billion) defined contribution multiemployer plan is looking to work with managers that can operate evergreen, scalable unlisted infrastructure debt, real estate debt and corporate loan funds. The number of managers selected will depend on the proposals that are submitted, a spokeswoman said. The size of the allocation will depend on the price and the valuation of the asset classes at the point when they are procured by NEST, she said.
Managers offering individual strategies as well as multiasset products will be considered. However, NEST said in a news release "small closed-ended funds are unlikely to meet its needs." In addition, in time, NEST intends to explore direct and co-investment opportunities.
"Developed market equities and bonds are looking fairly fully valued," said Mark Fawcett, chief investment officer, in the news release. "With volatility on the rise, we must find cost-effective ways to access alternative sources of return and diversify risk for our participants. We see long-term potential in private markets and alternative asset classes."
"We've recently added commodities and are now looking to add private credit to our toolbox. We don't buy the argument that private credit is out of reach for (defined contribution) plans. Our participants should have access to the same opportunities as pension savers in large, sophisticated defined benefit plans," Mr. Fawcett added.
The RFP is available on NEST's website. Registration is required. Proposals are due by noon British Summer Time on Oct. 8. A timeline for a hiring decision was not available.