Has Rachel Reeves created a private assets bottleneck?

In the first edition of AOX we look at the early data on whether pension schemes are actually investing more in private assets or not, in response to Rachel Reeves’s requests.

Good morning and welcome to the first ever edition of Asset Owner Exchange, a weekly newsletter aimed at all forms of asset owners wherever you are.

We are going to refer to ourselves as AOX. Feel free to do the same. Now, let’s get to business.

In the UK, the government has made a big deal of its plans to gently encourage pension schemes to invest in private assets - indeed it was one of the first announcements made by chancellor Rachel Reeves last year.

Her vision is to turn British pension schemes into the Caisse de dépôt et placement du Québec. My colleague Georgina has more to say on the comparison between British and Canadian pension schemes in today’s AOX email.

We thought, with about 12 months having passed since Reeves set out this goal, we would use data from our sister title Mandatewire to find out whether any pension schemes have taken heed yet.

Firstly we should caveat that yes, it is obviously very early days in this process. But if nothing else this will hopefully set a benchmark against which we can judge the success or failure of Reeves’s policy.

So far things are…not looking good.

In 2025 a net $7.3bn has been invested into private assets by UK pension schemes (this includes new mandate awards and asset reweightings).

If this sounds reasonable then consider that in 2023 a net of $14.8bn went into private assets.

So the amount of money going into private assets has effectively halved as the pensions sector considers its next move. This is a trend going back to 2024, when Reeves announced the policy.

It is worth noting that the amount of money leaving private assets has gone down in recent years.

So the “problem” we are seeing in 2025 so far is that a lot of people seem to be standing stock still, thinking about their next move.

Helen Forrest Hall, chief strategy officer at the Pension Management Institute, told AOX the slowdown was likely due to “reluctance”.

She said: “The government's inclusion of reserve powers to mandate asset allocation has introduced a degree of uncertainty.

“Schemes are understandably cautious, awaiting further clarity on how such powers might be exercised and what practical implementation would entail.”

It turns out that throwing a lorry-load of reform at a sector may slow down the pace of change. The success or failure of Reeves’s reform agenda will now depend on addressing this bottleneck.