The HSBC Bank (UK) Pension Scheme incorporates private markets into its defined contribution (DC) assets

20 March 2024

HSBC Bank (UK) Pension Scheme publishes on its website:

The HSBC Bank (UK) Pension Scheme (the “Scheme”), one of the largest corporate pension schemes in the UK, has today announced its commitment to incorporate private markets into its DC default investment strategies.

The Trustee, who is advised by LCP, has partnered with Fulcrum Asset Management (Fulcrum) to create a bespoke multi-asset private markets Long Term Asset Fund (‘LTAF’), which now has regulatory approval.

An allocation to the LTAF is being made in the context of the Trustee’s wider changes to the DC default investment strategies with the aim of accessing a broader range of more sophisticated and diversifying investment opportunities. In doing so, the Trustee is seeking to improve the outlook for members by targeting a higher expected risk adjusted investment return for those with DC benefits within the Scheme, as well as driving forward innovation within the DC industry.

Russell Picot, Chair of the HSBC Bank (UK) Pension Scheme Trustee Board, said: Improving expected member outcomes by targeting better risk adjusted returns through diversifying the assets in which members’ savings are invested have been at the heart of the HSBC Scheme. I’m delighted for our Scheme to take this step for our DC members and to drive positive change within the pensions industry.

Laura Myers, Partner and Head of DC at LCP, said: The HSBC Scheme’s investment in private markets is an important step for the DC industry. We’re proud to have been part of this project leading the way for single trust schemes with an innovative bespoke solution designed to enable members to benefit from investment in illiquid assets. The successful launch of the largest LTAF for a single trust scheme and incorporating it into the investment strategies demonstrates the dedication of the Trustee and Pension Scheme Executive team to driving innovation with the aim of improving member outcomes.

Matthew Roberts, Partner and Head of Alternative Solutions at Fulcrum, said: It is an honour to be appointed for this mandate by the Trustee. The strategy provides access to a panel of illiquid investment specialists, which combine to form a bespoke, diversified and flexible solution for the HSBC Scheme to deliver better expected outcomes for the Scheme’s DC members.

Daniel Smith, Fidelity International, Head of Workplace Investing Distribution, said: We are proud to support HSBC in this exciting project. It has demonstrated a strong partnership and collaborative mindset from everyone involved, while recognising the opportunity that private assets provides to improve member outcomes and diversification.

Source: HSBC Bank (UK) Pension Scheme