Asset owner November insights: new mandates, private markets solutions, net-zero under scrutiny

Last month saw modest activity among European asset owners in terms of new mandates, but enough to suggest that asset owners are steadfast in their commitment to combine their mission with the fight against climate change and with increasing Europe’s defence readiness.

NEST, the £68bn (€82bn) UK DC pension scheme appointed Wellington Management to carry its emerging markets equity strategy forward, as it seeks to strengthen the ESG evaluation and stewardship component of the strategy. The scheme has entrusted Wellington with £3.5bn of assets.

French public sector pension fund Ircantec said it had selected Amundi to run two mandates – €800m in global equities and €400m in European equities – and BNP Paribas Asset Management to manage a further €400m in European equities. Both seven-year mandates were awarded to manage assets in line with the fund’s climate and responsible investment goals.

Finland’s €72bn pension insurer Varma said it was investing €68m in home-grown anti-drone technology firm Sensofusion as the company conducts its IPO on the Helsinki stock exchange.

In an interview with IPE, Morten Malle, CIO of Lærernes Pension, the €25bn Danish pension fund for teachers, said that the institution is targeting a 35% allocation to private markets in five years’ time, up from the current 27%. This will encompass private equity, private debt, infrastructure, real estate funds, and directly held Danish residential real estate.

In the Netherlands, PGGM continues to expand its footprint in the credit risk-sharing market. On behalf of its largest client, healthcare pension fund PFZW, PGGM signed off on a transaction with ING, covering a €5bn portfolio of project finance loans across the EMEA and APAC regions, most of which directly contribute to the energy transition.

Owing to the uncertain outlook for interest rates and the wider European economy, risk management is front of mind for asset owners. Danish €96bn pensions giant ATP, which deals heavily in derivatives, is increasing the number of counterparties amid concern about concentrated exposure to a limited number of market participants, according to statements by ATP’s head of investment strategy Allan Sall Tang Japhetson at a conference in Copenhagen last month.

Meanwhile, in Finland, the full impact of the investment-rule changes for earnings-related pension insurers that took effect on 1 July is showing up, as institutions converge on one strategy: more equities, funded by bonds and property.

UK industry seeks DB and DC-fit private markets solutions

Developing pension funds into increasingly sophisticated investors that can participate fully in capital markets remains a key goal in markets such as the UK, where for instance M&G has launched a diversified private credit feeder long-term asset fund (LTAF) aimed at widening access to its private credit capabilities, with a focus on defined contribution (DC) pension schemes.

It launched with £74m, including capital from M&G’s £138bn With Profits Fund and aligns with the ambitions of the Mansion House Accord, under which 17 major UK workplace pension providers and schemes have committed to allocating at least 10% of their DC default funds to private markets by 2030, including at least 5% directly to UK private markets.

Data compiled by the Association of British Insurers (ABI) and Pensions UK showed that Mansion House Accord signatories had invested £11.1bn (€13.2bn) in UK private markets as of 31 December 2025.

The signatories held £22.1bn in global private market investments across defined contribution (DC) growth-phase assets, representing 6.6% of those assets, with 3.3% invested in the UK.

Property, including social and affordable housing, accounted for the largest share of UK private market investments, at £8bn. This was followed by infrastructure (£1.3bn), private debt and credit (£900m), and private equity (£500m).

On the DB side, run-on solutions are gaining momentum as TPT Retirement Solutions’ planned ‘superfund’ has successfully completing The Pensions Regulator’s (TPR) assessment process. This will allow TPT to progress towards its first transaction. The provider previously said it aims to launch its superfund with its first transaction in early 2027.

Meanwhile, M&G has launched run-on solution for DB pension schemes with a £400m deal. The solution is designed for well-funded DB pension funds seeking to generate additional value by reducing the amount of assets that need to be held to meet liquidity and collateral requirements, while retaining flexibility over endgame planning.

As pension schemes look to broaden their asset allocations beyond public markets, research from People’s Pension and Invesco found that larger UK defined contribution (DC) pension schemes could invest between £30bn and £90bn in UK private markets over time.

The research estimates that wider adoption of asset ownership capabilities across the DC market could also increase annual UK GDP by between £75bn and £110bn.

The UK’s Investment Association (IA) has also published a report setting out how access to private markets can be broadened responsibly, at scale and without weakening investor protection within the advised mass-affluent market.

It set out five priority actions for industry, regulators and policymakers. These include building demand and adoption in the mass-affluent market by developing a stronger evidence base on what investors need, how advisers behave and the role private markets can appropriately play within the portfolios of the mass-affluent market.

Net-zero commitments under scrutiny

In sustainable finance land, asset owners have been increasingly grappling with the implications for their net zero commitments and whether current methodologies are fit for purpose.

Speaking at PRI in Person in Amsterdam last month, London School of Economics (LSE) professor Tom Gosling questioned whether investors should maintain 2050 net-zero commitments when government policies are inconsistent with achieving them, and investors cannot control the outcome. Caisse des Dépôts (CDC) chief investment officer defended its 1.5°C climate target, describing it as the institution’s “north star”.

Elsewhere on the sustainability agenda, investors are moving on nature, where the tools are still being built. AP2, Storebrand and Aviva were among 13 investors namechecked this week for their work on nature, as two new frameworks launched to promote disclosures and targets.

Meanwhile, questions about how responsible investment policies are set and applied were playing out at the local level in the UK. IPE exclusively reported that the UK’s City of Westminster Pension Fund delayed selecting a pillar under its London CIV’s responsible investment (RI) framework while seeking clarification on exclusions affecting defence companies and the interpretation of international human rights standards. The review comes amid wider concerns about the balance of control between local government pension funds and central government under the new Pension Schemes Act.

Investors are losing faith in ESG ratings, according to new research from the ERM Sustainability Institute, and they expect climate impacts to hurt asset prices and influence strategic asset allocation, according to Robeco. The European Securities and Markets Authority (ESMA) has asked investors to stop conflating portfolio-level impacts with real-world ones. At the same time, PensionsEurope has called on co-legislators to further loosen the rules for pension funds under the proposed update to the Sustainable Finance Disclosure Regulation (SFDR 2.0).

In Denmark, a new database comparing responsible investment policies and equity holdings found that Danish pension funds hold DKK 258bn (€34.6bn) in companies excluded by at least one other pension fund, bank or state fund.

Germany tightens regulatory screws

In Germany, changes implemented by the German Federal Ministry of Finance mean companies are likely to see higher pension liabilities.

BaFin, the German financial supervisory authority, has tightened its oversight of sponsor insolvency rules for the country’s Pensionskassen and Pensionsfonds, in the wake of recent pension reforms. Pensionskassen and Pensionsfonds are now required to notify BaFin of the potential impact of an insolvency on asset allocation, employees, funding and contributions.

Meanwhile, the European Insurance and Occupational Pensions Authority (EIOPA) has warned that market risks remain elevated for European occupational pension funds amid persistent geopolitical tensions, despite an improvement in defined benefit (DB) schemes’ financial positions.

New additions to the European asset owner community

There is a new institution on the horizon in the German institutional landscsape. The professional pension funds for lawyers in Lower Saxony and Bremen are set to merge to create a €3bn institution, an uncommon step in a sector characterised by fragmentation. The merger of Hanseatische Rechtsanwaltsversorgung Bremen and Rechtsanwaltsversorgung Niedersachsen is scheduled to take effect on 1 January 2027, according to the Lower Saxony pension fund.

In Italy, FondoPro, a new Italian second-pillar pension fund, aims to attract 1.6m professionals affiliated with first-pillar pension funds, known as Casse di Previdenza.

From 1 October, the fund, previously known as FondoSanità, began accepting members from all Casse di Previdenza. Previously, membership was restricted to professionals working in the healthcare sector. Eppi, the pension fund for industrial experts, was the first to join FondoPro, following approval of its membership application by the fund’s board of directors.

Italian pension funds are working to adjust their operations to meet the requirements of the country’s occupational pension reform, which came into force in July. The reform introduced auto-enrolment for new hires, life-cycle investment options for their contributions, portability of employer contributions and more flexible benefit payouts. Lucia Anselmi, director general of pension regulator Covip, told IPE that pension funds are “working hard” to adapt to the new rules. Meanwhile, Federmeccanica, the organisation representing Italy’s metalworking industry, is challenging the rule allowing employees to transfer employer contributions from industry-wide pension funds to open pension funds or individual pension plans (PIPs), citing an exclusivity clause in the sector’s collective bargaining agreement.

News that caught our attention

Swiss pension funds have been investigating whether members’ sensitive personal data were compromised in a cyber attack on data management software provider PK Software at the end of September. PK Software provides data management systems to Publica, the pension fund for employees of the Swiss federal government, Pensionskasse Post, Migros Pensionskasse and Bernische Pensionskasse. Publica told IPE that members’ data, including salaries, pension assets and benefit amounts, as well as contact details, could have been affected by the attack.