Bringing down the barriers to investment in real assets

01 July 2020

Craig Brown Institutional Distribution Director

Author

Craig Brown
Institutional Distribution Director

Craig Brown discusses the advantages of investing in real assets on the Mobius Life platform.

Natixis Investment Managers has published a stimulating white paper on DC investment in alternatives. Its paper, ‘A fetish for liquidity’ found DC schemes, particularly master trusts, have both the liquidity reserves and a positive intention to invest in illiquid assets.

The paper also pointed out the potential obstacles facing schemes if they want to invest in illiquids. It says “cost is seen as a barrier, as is the lack of daily valuations for these assets and the use of platforms which require daily prices.”

Well, fortunately not all platforms are the same. At Mobius Life we already have the flexibility and capabilities today to handle private assets and other illiquid investments, not just for DC schemes, but for DB as well.

We’ve invested in flexible technology which means we can hold funds on the platform which are not priced daily – and we can report effectively on these assets to trustees and their advisers.

It seems some competing platforms don’t have the same technological capabilities. Or perhaps they have opted for the simple life by only providing access to a more limited core range of liquid funds.

We’re also able to help ‘lower governance’ schemes, which make up the majority of the UK’s pension market, to invest in private asset funds with high minimum investment limits. Our ability to aggregate holdings gives smaller schemes access to these alternatives on a cost-effective basis.

Natixis says we “need to encourage UK DC schemes to take the plunge and enjoy the benefits that the illiquidity premium and overall diversification bring”. At Mobius Life we have the technology, flexibility and access to illiquid funds to help our clients reap these benefits today.

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