Investor sentiment towards private markets continues to be positive, despite the continuing challenges of higher interest rates and ongoing macroeconomic uncertainty.
Last year, the manager of Germany’s pay-as-you-go first-pillar scheme, Deutsche Rentenversicherung, recorded income of €363bn, the largest share coming from contributions (€275.6bn), and €87.4bn in public subsidies.
The Houses of Parliament and Cambridge University are two venerable British institutions. But the differences in how they run their pension arrangements illustrate the contrast between the UK-style pooled liability-driven investment (LDI) and a more traditional form of pension investing, no longer as popular in the UK but still common elsewhere.
Continental Europe appears to have largely escaped the trend known in the US as the ‘Great Retirement Boom’, where an economically comfortable cohort of 50 to 64-year-olds has retreated from work in the post-COVID period.
For pension funds and other similar large institutional pools of capital, there is significant pressure from politicians to invest in politically favoured domestic sectors – like renewables or high-growth sectors like venture capital.