NEST, the UK’s largest workplace pension scheme by members, has selected BlackRock’s risk management service, Aladdin, to manage the risks of its entire investment strategy on a single platform.

NEST said that managing key investment risks within its portfolio was a “crucial” part of its long-term plan to continue to evolve its investment strategies across both public and private markets.

The Aladdin platform, inclusive of Aladdin Climate, allows NEST to monitor more than 3,000 risk factors across fixed income, equity, foreign exchange, and private markets, and quantify the financial impact of climate-related risks.

This, NEST said, will help it build a more resilient portfolio and enhance its capability to undertake greater and more sophisticated risk analysis.

Jiwei Dong, NEST’s head of market risk and asset allocation, said that the complexities facing a “sophisticated portfolio” like NEST’s are “significant”.

“It’s crucial we upgrade our services in line with our projected growth to be a £100bn scheme by the end of the decade,” he added.

He said that just in the “past few years” NEST expanded its investable universe to include more illiquid assets while also adopting more complicated public market investment strategies.

He said that Aladdin allows NEST to get a holistic view on risk profiles of its multi-asset portfolios, and fully integrate ESG factors within its risk management process, matching the level of complexity it needs.

Sarah Melvin, head of UK at BlackRock, said that NEST plays a “crucial” role in supporting over 12 million people in the UK saving for their retirement, adding that both BlackRock and NEST share a joint purpose of helping more and more people experience financial well-being.

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