Taking DC savers beyond the limits of public markets

Private markets open the door to a far bigger investment universe than public markets. 

Public markets capture only a small slice of the economy - mainly large, listed companies and standardised bonds. Private markets, by contrast, give access to the vast majority of businesses across the globe, from start-ups and fast-growing mid-sized firms to privately owned infrastructure, real estate and specialist assets. 

They also span a much broader set of strategies - private equity, private credit, real assets and niche opportunities - many of which simply don’t exist on public exchanges. Add in bespoke deal structures, longer investment horizons and exposure to local or emerging themes, and the opportunity set expands dramatically. 

We want our workplace pension members to be able to benefit from the enhanced diversification and long-term growth opportunities private markets bring. 
 

Accessing private markets for members 

Our new workplace pension lifestyle investment propositions - Scottish Widows Lifetime Investment Plus and Extra - access private markets through our two bespoke Long-Term Asset Funds (LTAFs). 

They provide members with scalable, well-governed access to private markets and each is managed by a specialist investment manager.  

• The CG SW Growth LTAF is designed for the growth phase of our new lifestyle strategies when members are years away from retirement and seeking maximum growth. The LTAF invests into higher-return, value-add asset classes such as private equity, venture capital, infrastructure equity, value-add real estate and high-yielding private credit. It’s managed by Aberdeen Investments. 
• The CG SW Diversified Credit LTAF is designed to provide diversification and deliver more income-focused returns with lower expected volatility as members move into the de‑risking phase and go to-and-through retirement. It invests across a broad range of private credit opportunities, including infrastructure lending, real estate debt, direct lending and credit risk sharing. It’s managed by BNP Paribas Asset Management. 

Lifetime Investment Plus invests around 11% in the LTAFs and Lifetime Investment Extra around 23%.  
 

Why manager selection matters 

In private markets, access and execution are everything. Returns can vary widely depending on the quality of opportunities sourced and the skill of the manager deploying capital. 

Our philosophy is simple: partner with the best specialists and build long term relationships. An open architecture approach allows us to select best in class managers across different private market asset classes rather than relying on a single, vertically integrated provider. This gives us the flexibility to add further investment managers over time. 
 

Leveraging experts in global deal origination  

Through our rigorous selection process, Aberdeen and BNP Paribas proved they have the operational capability to deploy capital efficiently across the full spectrum of deals, including primary funds, secondaries, co-investments and direct assets with responsible investment and ESG integration embedded in their processes. 

But even more importantly, they displayed deep origination capabilities and access to high-quality opportunities both directly and through global networks of private market specialists.  Their relationships span hundreds of general partners, multi managers and direct sourcing platforms to access high quality deal flow on our behalf across private equity, infrastructure, venture capital and private credit. 

Aberdeen, for example, works with a plethora of leading managers such as Kohlberg Kravis Roberts (KKR), Bridgepoint, EQT in private equity and venture capital and Brookfield Asset Management, Octopus Capital and Nova Infrastructure in real assets – to name just a few. 
 

Four examples of what we’re investing in 

• Andreessen Horowitz - Andreessen Horowitz (a16z) is one of the world’s leading venture capital firms, with a focus on high-growth US technology companies. This opportunity was sourced through alternative asset manager HighVista, which has previously backed early-stage investments in notable companies including Airbnb, Wise, Pinterest, Instagram and Facebook. We’re invested in a16z LSV Fund I, II and III, along with two other venture capital funds, through Aberdeen’s Global Private Markets Fund, gaining exposure to major IPOs including Roblox, Coinbase, and Figma. The portfolio’s current exposure includes notable high-growth private market leaders such as Databricks and SpaceX.  
• Action - We’re investing in Action, Europe’s fastest growing non-food discount retailer, through a co-investment alongside 3i - a leading UK private equity sponsor. Action has over 3,300 stores across Europe and attracts 21.6 million weekly shoppers, focusing on value, quality, and increasing sustainability. Aberdeen, via an affiliated partner Patria, invested €10 million in the business. The investment has generated returns exceeding 40% per annum since inception*. To manage concentration risk, the position has been prudently trimmed on two occasions, demonstrating a disciplined approach to portfolio management. 
• Albion Growth Special Purpose Vehicle (SPV) - Albion Capital is a UK based private equity and venture capital manager, best known for investing in smaller UK businesses. To harness opportunities in the rapidly evolving AI and the disruptive fintech space, Aberdeen established a dedicated Special Purpose Vehicle (SPV) to access multiple co-investment deals alongside Albion’s large-cap technology strategies. Key positions include:
  
  • £5 million in Quantexa, a UK-based leader in data, analytics and AI for banks, insurers, telecoms, healthcare providers and government agencies worldwide.
  • £4 million in Celoxica, a provider of fast response trading technology for high-frequency trading firms, which was valued at three times the initial investment within just 12 months.
  • £1 million in Gravitee, an API management platform that controls how different systems securely share data and services with each other.  

• Dott - We have a direct equity investment in Dott, a provider of urban micro-mobility solutions such as shared e-bikes and e-scooters that contribute to more sustainable city transport systems. The equity position is the second investment in Dott, following a direct lending investment which ended in 2025. The previous debt investment was structured to yield SONIA plus 15% over two years, underpinned by robust financial covenants. Aberdeen supported Dott through its merger with Tier, negotiating a partial early repayment. It also supported the company through a full debt refinance via the raise of a public Nordic bond, with the remainder of Aberdeen exposure repaid in full, resulting in a 16% annualised return over the course of the investment**. We remain supportive of the company, and have invested in the equity of the business following the above refinancing activity to benefit from the anticipated growth over the coming years.

The Lloyds Banking Group advantage 

As part of Lloyds Banking Group, we will also look to leverage group capabilities in originating and managing UK-based private market assets. This would enable us to bring home-grown opportunities to our pension customers not found elsewhere. Specifically, this includes leveraging Lloyds Development Capital for private equity investments, Lloyds Living for social housing initiatives, and the provision of private credit to UK businesses and projects. 

Where assets are sourced internally, independent oversight and scrutiny remain essential and full due diligence and underwriting will be undertaken by our appointed LTAF managers. 
 

To sum up 

By carefully integrating private markets into our workplace pensions, we’re broadening the opportunity set available to members in a way that is thoughtful, well governed and aligned with long term retirement outcomes. Through specialist managers, diversified structures and disciplined portfolio construction, private markets can enhance diversification, support long term growth and deliver resilient income, while maintaining appropriate risk controls. Our aim is simple: to give members access to parts of the global economy that were previously out of reach, helping their pension savings work harder over the long term. 
 

Sources 

*Aberdeen, 31 December 2025. Annualised performance since initial investment in 2020.  

**Aberdeen, 31 December 2025. Annualised performance since initial investment in 2023.