Why Private Markets Are Now Core to Stewardship
Private markets are no longer treated as tactical diversifiers. Among institutional investors operating north of £25 billion in AUM, they’ve become a core component of strategic asset allocation, a place where long-term stewardship, transition finance and influence over the real economy are put into practice.
This isn’t a trend driven by novelty. It’s a deliberate shift. Asset owners are allocating into infrastructure, private equity, credit, and real estate, not simply in search of uncorrelated returns, but because these markets offer the ability to engage directly in how assets are built, run and governed.
From Allocation to Accountability
At scale, private markets offer:
- Influence over strategy, governance and impact delivery at the asset level
- Capital alignment with net zero, adaptation, and wider social objectives
- The ability to structure KPIs, reporting covenants and escalation mechanisms into funding
- Long-dated, often inflation-linked cashflows that support liability-aware investing
“Private markets are no longer about window dressing climate exposure. They’re where we build and operate transition-critical infrastructure,” said a UK LGPS pool executive.
Capital in Action
Brunel Pension Partnership
Brunel continues to scale its private markets exposure with a focus on social housing, clean infrastructure and UK regeneration. Partners include Gresham House and Schroders Capital, selected for their sector focus and integrated stewardship approach.
USS (Universities Superannuation Scheme)
USS has made direct investments in GRIDSERVE and Galileo Green Energy, reinforcing its conviction in scalable clean energy platforms with long-term income characteristics and embedded net-zero alignment.
AustralianSuper
Australia’s largest super fund, with over A$80bn in private markets, is backing energy storage, digital infrastructure and global logistics. It is increasingly operating as a co-investor, building in-house capacity to originate and manage complex assets globally.
CPPIB & PSP Investments
Canada’s leading public funds continue to evolve their private markets platforms to reflect climate and resilience priorities. CPPIB’s recent moves span sustainable data centres and transition-focused private credit. PSP has pivoted toward nature-positive assets and long-term agricultural holdings.
Stewardship by Design
Private markets provide institutional capital with the structures to embed stewardship from the outset:
- Negotiated governance terms and control rights
- Reporting obligations aligned with ESG and transition metrics
- Influence over portfolio company behaviour, supply chains, and labour practices
For asset owners serious about delivery, not just disclosure, this level of design is increasingly essential.
What Scale Enables
Engaging meaningfully in private markets at institutional scale requires:
- Origination and underwriting teams with sector and ESG expertise
- Governance frameworks capable of handling direct influence and active ownership
- The capacity to absorb illiquidity without compromising liquidity management
- A long-term capital culture that matches the pace of real-world change
These attributes aren’t universal. But for investors already operating at scale, they are increasingly expected.
The View Forward
Capital is moving off-exchange and with it, the levers of influence. Investors who lead in this space are already embedding stewardship into how infrastructure is financed, how platforms are governed, and how sustainability is measured.
But with greater access comes greater scrutiny. As allocations deepen, asset owners must keep a close eye on transparency, GP discipline, and their own capacity to maintain oversight. The next test won’t be whether they can enter private markets, it will be whether they can hold them to account.
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