Investor types

Pension funds

Pension funds are the largest pool of long-term institutional capital, with US$68,274 billion across the 22 largest pension markets at the end of 2025. Their appetite for private markets is shaped by the type of scheme, its funding position and national investment rules.

What a pension fund is

A pension fund is a funded scheme that collects contributions and invests them to pay retirement benefits. In a defined benefit (DB) scheme the sponsoring employer bears the investment and longevity risk and promises a level of pension; in a defined contribution (DC) scheme the member bears the risk and the pension depends on the value of the member's account. Public schemes cover government employees and, in some countries, national pension systems.

Pension funds differ from sovereign wealth funds, whose owner is the state and which have no member liabilities, and from insurance companies, which invest against policy liabilities under solvency regimes. Some state funds sit on the boundary: Norway's Government Pension Fund Global appears in the leading pension fund ranking and is also treated as a sovereign wealth fund.⁴

Scale

The Thinking Ahead Institute's Global Pension Assets Study 2026 estimates pension assets in the 22 largest markets (the P22) at US$68,274 billion at the end of 2025, up 9.6% from US$62,313 billion a year earlier. Outside the P22 it estimates a further US$3 trillion to US$6 trillion.¹ The United States holds 65.8% of P22 assets, followed by Canada with 5.5% and Japan with 5.0%. The seven largest markets (the P7: Australia, Canada, Japan, the Netherlands, Switzerland, the UK and the US) hold US$61,975 billion.¹

The 300 largest individual pension funds increased their assets by 13.4% in 2025 to a record US$27.7 trillion.⁵

1. United Kingdom. The Pension Protection Fund's Purple Book 2025 estimates 4,840 DB schemes in its eligible universe at 31 March 2025, down from 4,974 a year earlier, with 8.6 million members. On the section 179 basis, the schemes held £1,068.1 billion of assets, the aggregate funding ratio was 125.0% and the net surplus was £213.9 billion.³ UK pension assets grew 3.0% in US dollar terms in 2025.¹
2. Switzerland. According to the Federal Statistical Office, the balance sheet total of Switzerland's 1,292 occupational pension funds reached CHF 1,220.6 billion at the end of 2024, up from CHF 1,129.1 billion a year earlier.⁶
3. Wider Europe. Institutions for occupational retirement provision (IORPs) in the EU held €128 billion, 4.4% of their total assets, in private credit, according to EIOPA's Financial Stability Report of 15 December 2025.¹²
4. Gulf and Asia. In the 2026 ranking of the 300 largest funds, with data to the end of 2025, Japan's Government Pension Investment Fund holds US$1,872,068 million, Korea's National Pension Service US$1,005,541 million, Taiwan's Labor Pension Fund US$242,759 million and Kuwait's Public Institution for Social Security US$164,833 million.⁴

Structures and sub-types

The main division is between DB and DC. DC schemes hold 63% of P7 pension assets.¹ The share varies widely: 90% in Australia, 72% in the US and 44% in Canada. In the UK the DC share is about 40%, up from 18% in 2020.² Within each type, schemes are further divided into corporate schemes sponsored by a single employer, multi-employer and industry schemes, public sector schemes and national reserve funds. In Switzerland, occupational pensions are provided through company pension funds (Pensionskassen), collective foundations that pool many employers and separate plans for higher earners.

Source of capital and investment horizon

Capital comes from employer and employee contributions and from investment returns. Horizons are long, but they depend on the scheme's maturity. Over the last ten years, DC assets grew at 9.4% a year and DB assets at 3.2% a year across the P7.¹ Open schemes with growing DC assets can commit to illiquid private funds for a decade or more, while mature or closed DB schemes focused on paying pensions need liquidity and predictable income and often follow liability-driven investment strategies.

How pension funds invest in private markets

At the end of 2025 the average P7 allocation was 48% to equities, 31% to bonds, 19% to other asset classes and 3% to cash.¹ Over 20 years the equity share has fallen by 9 percentage points and the share in other asset classes has risen by 6 points.²

Allocations differ sharply by market.

1. UK DB schemes held 70.6% of their investments in bonds and 15.1% in equities at 31 March 2025, and the share of assets in annuities reached a record of just under 13%.³
2. Swiss pension funds held 34.1% in equities, 29.3% in bonds, 22.6% in real estate and 9.8% in alternative investments at the end of 2025, according to Complementa's study of 469 funds with CHF 1,009 billion. Within alternatives, infrastructure was 2.8% and private equity 2.4% of total assets.⁸ Real estate exposure rose from 17.1% in 2014 to 22.9% in 2023.⁷

Pension funds reach private markets mainly through commitments to private equity funds, infrastructure vehicles and funds of funds, alongside co-investments. The largest public funds, notably in Canada, also run internal teams that invest directly in companies and assets. Fonds de Pensions Nestlé, for example, has built private equity and infrastructure programmes that account for close to 14% of its assets.¹³

How decisions are made

Investment decisions rest with trustees or a board, advised by internal investment staff and external investment consultants. A typical manager selection runs through a consultant's search or an internal screening, followed by due diligence on performance, fees, operations and responsible investment practice, and ends with a recommendation to the investment committee or board. Because committees meet on a fixed calendar and consultants must often complete their own review first, the process for a new manager is usually longer than for a private investor.

The Thinking Ahead Institute reports that the Total Portfolio Approach, in which a fund assesses each investment by its contribution to the whole portfolio rather than against fixed asset class buckets, has moved into the mainstream, reinforced by high-profile adopters such as CalPERS.¹

What pension funds look for and why they decline

Pension trustees look for net returns that justify the illiquidity, cash flows that fit the scheme's benefit payments, transparent fees, institutional-quality reporting and sound operational controls. Proposals are commonly declined because fees are high relative to the expected net return, because operational or governance standards fall short, because the tax or legal structure is complex for the scheme, because of reputational risk or because the lock-up does not match the scheme's liquidity needs. Regulatory limits also matter: a Swiss fund already at its alternatives limit has no room for a new commitment without using the extension rule described below.

Regulation and governance

National rules set the limits within which trustees exercise their fiduciary duty.

1. United Kingdom. Under the Mansion House Accord of 13 May 2025, 17 workplace pension providers intend to invest at least 10% of their DC default funds in private markets by 2030, with 5% of the total allocated to the UK. Total pension assets in scope amount to at least £252 billion.¹⁰ DC default arrangements are subject to a charge cap of 0.75% a year under the Occupational Pension Schemes (Charges and Governance) Regulations 2015, which shapes how far they can pay private markets fees.¹⁴
2. Switzerland. Article 55 of the BVV 2 ordinance caps alternative investments, including private equity, at 15% of total assets, equities at 50% and real estate at 30%. Infrastructure has had its own limit of 10% since 1 October 2020, and investments in unlisted private equity and private debt of companies based and operating in Switzerland have had a separate 5% category since 1 January 2022.⁹ Under Article 50 paragraph 4, a fund may exceed these limits on the basis of its regulations if it conclusively demonstrates compliance with the prudence rules in the notes to its annual accounts.⁹ The minimum interest rate credited on mandatory retirement savings is 1.25% for 2025 and 2026.¹⁵
3. European Union. IORPs are supervised nationally within the EU framework, and EIOPA monitors their private credit exposure.¹²

Trends in 2025 and 2026

Global pension assets rose 9.6% in 2025 to a new high, and the 300 largest funds grew 13.4%, the fastest since 2017.^1,5 In the UK, the first progress report on the Mansion House Accord found that signatories held £22.1 billion in global private market investments at 31 December 2025, of which £11.1 billion was in UK private markets.¹¹ UK DB schemes continued to de-risk, with annuities at a record share of assets.³

Swiss pension funds had a strong year. Complementa reports an average return of 6.3% in 2025 and an average funding ratio of 114.4% at the end of the year, up from 111.8%, with members' savings credited with interest of 4.3%.⁸ IPE reported in September 2025 that a large number of pension funds linked to SMI and SLI companies were already investing the maximum 15% in alternatives permitted by regulation.¹³

Notable examples

How advisers and placement agents work with pension funds

Most pension funds take advice from investment consultants, who run manager searches and maintain lists of rated managers, and some delegate management to an outsourced chief investment officer. A fund manager or company seeking pension capital therefore usually needs the support of the fund's consultant as well as its in-house private markets team, and engagement typically begins well before the target closing date because of committee calendars and consultant reviews. Allocation limits such as the Swiss 15% cap on alternatives determine how much room a scheme has for a new private markets commitment.⁹ Anglo-Suisse Capital advises on capital raising, M&A and secondary transactions with professional investors.

Frequently asked questions

How much money do pension funds hold worldwide?

The 22 largest pension markets held US$68,274 billion at the end of 2025, with an estimated US$3 trillion to US$6 trillion more elsewhere.¹

How large is the Swiss occupational pension system?

Switzerland's 1,292 pension funds had a balance sheet total of CHF 1,220.6 billion at the end of 2024, according to the Federal Statistical Office.⁶

Will UK DC schemes invest more in private markets?

Under the Mansion House Accord of 13 May 2025, 17 providers intend to invest at least 10% of DC default funds in private markets by 2030, with 5% in the UK.¹⁰

How much have Mansion House Accord signatories invested so far?

£11.1 billion in UK private markets and £22.1 billion globally at 31 December 2025.¹¹

How much can a Swiss pension fund put into private equity?

Alternatives, including private equity, are capped at 15% of assets under Article 55 BVV 2, with a separate 5% category for unlisted Swiss private equity and private debt; the limits can be exceeded under Article 50 paragraph 4 if compliance with the prudence rules is demonstrated.⁹

Are UK DB schemes buyers of private assets?

Mostly they are de-risking: at 31 March 2025 they held 70.6% of investments in bonds and just under 13% of assets in annuities.³

Is DC overtaking DB?

In the seven largest markets DC schemes hold 63% of pension assets.¹

What is the largest pension fund?

Norway's Government Pension Fund Global, at US$2,109,484 million in the 2026 TAI and P&I 300 ranking, followed by Japan's Government Pension Investment Fund at US$1,872,068 million.⁴

Working with Anglo-Suisse Capital

Anglo-Suisse Capital advises companies, fund managers and shareholders on capital raising, M&A and secondary transactions with professional investors in the UK, Switzerland and internationally.

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Sources

1. Thinking Ahead Institute: Global Pension Assets Study 2026, summary (9 February 2026)
2. Thinking Ahead Institute: Global pension assets rise by nearly 10%, reaching new high (9 February 2026)
3. Pension Protection Fund: The Purple Book 2025 (December 2025)
4. Thinking Ahead Institute and Pensions & Investments: P&I 300 ranking 2026 (September 2026)
5. Thinking Ahead Institute: The world's largest pension funds 2026 (2026)
6. Federal Statistical Office: Pension Fund Statistics 2024, final results and key figures (21 January 2026)
7. Complementa: Alternatives in Swiss pension funds (8 November 2024)
8. Complementa: Risiko Check-up 2026, Versicherte profitieren mehr als üblich (8 September 2026)
9. Fedlex: Ordinance on Occupational Old Age, Survivors' and Invalidity Pension Provision (BVV 2), Articles 50 and 55 (version of 1 January 2025)
10. Pensions UK: Mansion House Accord (13 May 2025)
11. IPE: Mansion House Accord signatories invest £11.1bn in UK private markets (21 October 2026)
12. EIOPA: EIOPA flags financial stability risks related to private credit (15 December 2025)
13. IPE: Swiss large corporate pension funds eye private markets for higher returns (15 September 2025)
14. legislation.gov.uk: Occupational Pension Schemes (Charges and Governance) Regulations 2015, regulation 6
15. Swiss Federal Council: BVG minimum interest rate remains at 1.25% (5 November 2025)

This page is general information for professional investors and is not investment advice. Figures are taken from the sources listed, as at the dates stated.