Unlocking access: How pension funds can secure quality private market investments

As pension funds increasingly allocate to private equity, private credit, infrastructure and real assets, the focus shifts from whether to invest in private markets to the more nuanced challenge of how to implement to secure the most attractive opportunities.  

‘Private’ is the key word in private market investing, and gaining access to quality origination of investment ideas is inherently constrained. To maximise harvesting private markets premia, pension funds need to leverage a combination of networks, specialised expertise and strategic partnerships through scale and robust governance structures.  
 

Building long-term relationships with high quality managers 

Forging and nurturing strong, long-term relationships with leading general partners (GPs) is vital to securing the most attractive private market opportunities. The most sought-after investments are typically reserved for investors who have demonstrated consistent reliability and engagement over several investment cycles as well bringing more than just capital to the table, such as their experience, specialism or seats on a board. These trusted relationships can give pension funds a distinct edge by: 

• Gaining access to oversubscribed funds: Long-standing, dependable partners are more likely to be invited into high-demand, capacity-limited funds. 
• Improving transparency and due diligence: Closer ties with GPs often lead to better information sharing and deeper insight into underlying investments. 
• Unlocking co-investment opportunities: Strong partnerships can open the door to co-investments, enabling pension funds to optimise overall fees and target specific assets or strategies, ultimately improving net returns. More on this later. 
   

Achieving scale through pooling and partnerships 

Private market opportunities can require large commitments which may bring in concentration risks and limit access for smaller and mid-sized pension funds – hence the growing significance of pooling and partnership arrangements.  

By joining asset pooling arrangements, investing through collective vehicles, or forming strategic alliances with other institutional investors, pension funds can combine their capital to achieve the scale needed for high quality private market investments.  

This scale not only broadens access to larger and more competitive deal flow but can also enhance negotiating power on fees, governance rights, and other key terms.  

At the same time, pooling allows schemes to build more diversified portfolios across sectors and geographies – an important factor in managing risk in private markets. 
 

Using specialist intermediaries and platforms 

Private markets are complex, so many pension funds work with specialist managers or advisers. This helps pension funds access top managers and unique opportunities that would be hard to reach on their own.  

Specialists’ due diligence expertise and research capabilities help pension funds assess manager quality, operational risks, and strategy fit with far greater depth and confidence. They can also support disciplined portfolio construction and pacing, ensuring commitments are spread appropriately across strategies, geographies and vintages to manage risk and maintain consistent exposure.  
 

Developing coinvestment and direct investment capabilities 

Developing coinvestment and direct investment capabilities is an increasingly important evolution for larger pension funds as their private market allocations grow.  

By investing alongside trusted managers or pursuing selective direct opportunities, schemes can reduce overall fee drag, gain greater transparency and target exposure to specific assets or strategic themes.  

These approaches can strengthen long-term returns, but they demand robust internal governance, the ability to make rapid investment decisions, and either strong inhouse expertise or the support of experienced external partners.  

For pension funds without these capabilities, coinvestment can introduce execution and concentration risks that outweigh the potential benefits, underscoring the need for careful design and disciplined processes. 

Taking a disciplined, long-term approach to manager selection 

In private markets, the performance gap between managers is much greater than in public markets. Maintaining a thoughtful and methodical approach to manager selection is therefore critical.  

Success depends on rigorous due diligence that covers multiple market cycles, evaluating not only past performance but also organisational strength and team stability, as well as the scalability of the investment strategy.  

Pension funds must assess capacity constraints carefully – top tier managers often limit fund size to protect returns – and ensure that incentives and culture are aligned with long-term value creation.  

Crucially, discipline means being willing to walk away from popular or high-profile strategies if they no longer offer attractive risk adjusted returns. This consistency and selectivity are key to building resilient private market portfolios over time. 
 

Aligning private market investments with DC member outcomes 

To deliver positive outcomes for DC members, private market assets should be selected within strong governance frameworks that prioritise robust valuations and adequate liquidity. Transparency around charges and any performance fees is also essential.  

It’s important to ensure not too much of the portfolio is in liquid assets to prevent unnecessary cash drag that can reduce returns.  

Instead, maintaining clear visibility of both ongoing member and scheme cashflows, alongside cultivating strong relationships with investment managers, is crucial for aligning the asset-by-asset investment pipeline. This ensures that cashflow is managed at an optimal level, taking into account that the underlying assets each have their own cycle – from commitment and deployment through to eventual distribution. 

Furthermore, transparency regarding underlying investments is critical. Collectively, these measures support a well-paced and diversified private markets strategy for DC schemes, helping to optimise portfolio outcomes and resilience over time. 
 

Committing consistently across market cycles 

Some of the strongest long-term returns are generated by investors who deploy capital during periods of market stress, when competition is lower and entry valuations are more attractive.  

Consistent pacing also signals reliability to managers, strengthening relationships and improving access to oversubscribed funds. By staying active through the cycle rather than reacting to short-term market swings, pension funds position themselves to capture the full breadth of private market opportunities and build more resilient portfolios. 
 

Final thoughts  

Accessing the best private market investments is not simply a matter of manager selection or asset allocation. It is the result of a long-term strategy, flexible structure, governance strength, scale, and partnerships.  

Pension funds that find the right balance between access, flexibility, governance, and expert resources are best placed to overcome access barriers and capture the long-term value that private markets can offer.