USS opens up DC section to PE investments

The move comes as funds invested in DC have exceeded £1bn, while exposure to private markets assets was already available for the members of the defined benefit (DB) section.

This is the first time that direct investments to private markets would be available through the DC section.The DC section has invested in private markets via funds, previously.

Around 85,000 DC members will see the investment remit of their funds in the Default Lifestyle Option expanded to include an allocation to private markets.

Private market assets have been difficult to provide to DC members in the UK because they are not traded daily and incur high charges. Nevertheless, the pension scheme has developed a service that is anticipated to enhance the return profile of the Default Lifestyle Option, with no increase in cost to members or to their employers.

The private markets portfolio is managed by an in-house team. Founded in 2007, the private markets group has £17bn in assets under management and the team consists of 50 people.

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