Publications

- December 1, 2019: Vol. 13, Number 11

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Opening the floodgates: NEST’s decision to begin managing investments in-house is good news for the real estate world

by Marek Handzel

Significant news came out of the UK at the tail end of the summer, when the country’s largest defined contribution pension scheme, NEST, applied to become a regulated Occupational Pension Scheme (OPS) firm.

Becoming an OPS would allow NEST — which was set up by the UK government to give companies a cheap and simple pension scheme to place their workers into under the country’s auto-enrolment regime — to undertake investment management on behalf of its members. NEST wants to take complex investment decisions and tasks in-house through a new subsidiary called NEST Invest that would see the scheme follow in the footsteps of a number of other large UK pension schemes, including RBS and BT, who have also created OPS firms.

NEST Invest will allow the pension fund to implement more sophisticated ways of investing on behalf of its members. These include directing fund managers to use derivatives and, crucially, to co-invest in private markets.

The move could sig

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