Top1000funds.com

A handful of Danish pension investors are pulling capital out of the US market citing concerns about the nation’s ballooning debt and President Trump’s aggressive stance towards Greenland, but acknowledged that completely divesting from the US market is unrealistic.

The $24 billion Danish pension fund for academics, AkademikerPension, made headlines this week after announcing that it will divest its entire $100 million portfolio in US government bonds.

Chief investment officer Anders Schelde told Top1000funds.com the fund will invest in US dollars and short-dated agency debt as alternatives to US Treasuries, which were only used for liquidity and risk management purposes.

Schelde said the move is not a political message but “rooted in the poor US government finances”, the ongoing tension in Greenland certainly made the decision easier.

The biggest sovereign exposure in the fund’s $9.1 billion government and mortgage bonds portfolio is $703 million in Danish government debt.

Meanwhile, PFA Pension, Denmark’s largest fund with $129 billion in assets, said it sold down US Treasuries in 2025 and increased currency hedging due to the US’ “unilateral” trade policies and repeated challenges from President Trump to the nation’s central bank, according to a website statement from chief strategist Tine Choi Danielsen.

The $44 billion Sampension is similarly mulling over US exposures in its listed equities (25.7 per cent of the total portfolio) and alternatives portfolio (32 per cent). The fund doesn’t target US Treasuries in its strategic asset allocation.

“We are currently maintaining a wait-and-see approach. However, the prevailing uncertainty is not supportive of investments in the United States,” deputy chief investment officer Jesper Nørgaard told Top1000funds.com.

However, it might indeed be the case that a complete divestment from the US will hurt Danish funds’ performance and ultimately their pensioners more than the US government’s balance sheet.

AkademikerPension’s Schelde said due to the US market’s strong historical performance, the fund is “unlikely” to retreat completely from its exposure to the US. Its $7.6 billion listed equities and $1.8 billion unlisted equities portfolios are both dominated by the US with an allocation of around 60 per cent.

Danish investors owned $9.88 billion in US Treasuries as of November 2025, according to data from the Federal Reserve. which is a fraction of the $9.3 trillion US Treasury debt owned by foreign countries.

But 26 per cent of Denmark’s $782 billion pension assets are invested in the US as of March 2025, according to figures from the Danish industry association for insurer and pension association, Forsikring & Pension. This has grown substantially from 16 per cent in 2018 and officially overtook the holdings of European assets in 2022.

Danish pension investments in US stocks have yielded a return of $89 billion since 2018, far outpacing the $15 billion yielded from European stocks and the $38 billion from Danish stocks in the same period and highlights the risk and return impacts associated with any decisions to divest

US Treasury Secretary Scott Bessent’s biting words at the World Economic Forum this week showed it would need much more investor action, than just the changes from the Danish pension funds, to sway the US’ geopolitical ambition.

“Denmark’s investment in US Treasury bonds, like Denmark itself, is irrelevant,” he told reporters at a press conference at Davos on Wednesday.

“It’s less than $100 million, they’ve been selling treasuries for years. I’m not concerned at all,” he said, referring to AkademikerPension’s announcement.

He also dismissed the idea that European investors can weaponise the $8 trillion of US assets they hold and initiate a mass sell-off as a way to keep the US in line on Greenland.

Nevertheless, Trump later backed down from tariff threats towards Europe in a speech delivered to the same forum, marking a de-escalation of the tension, but said he will “seek immediate negotiations” around the acquisition of Greenland from Denmark.

How Europe can assert its independence from an increasingly aggressive US will be an ongoing theme in the coming years.

AkademikerPension’s Schelde expects more investors to allocate financial support to Europe’s strategic independence from the US.

“It is clear that these funds will not flow to the US or other non-European markets. Our own recent investment in a European defence fund can be seen as a good example of this,” he said.

For more on how European funds are investing in defence in the region, see [Europe rearms, defence returns surge, asset owners rethink exposure].

This is the fifth part in a series of six columns from WTW’s Thinking Ahead Institute exploring a new risk management framework for investment professionals, or what it calls ‘risk 2.0’. See other parts of the series here.

In our previous thought piece, we considered how risk 1.0 hadn’t really protected us when we needed it most. Looking at the past is informative but ultimately what matters is how the risk 2.0 mindset and practice might help to address potential future risk events. With this in mind, we explore two potential future risk scenarios and describe how each would be interpreted and managed through a risk 1.0 lens and a risk 2.0 lens.

Uninsurable future THROUGH A risk 1.0 lens

The ‘uninsurable future scenario’ is driven by an escalation in insurance premiums (in particular home insurance but also commercial insurance) to levels that are unaffordable. The increasing frequency and severity of climate-related disasters – such as floods, wildfires, and storms – are treated as external shocks that disrupt insurance markets. These events lead to higher claims, which in turn drive up premiums and reinsurance costs. As insurers respond by withdrawing coverage from high-risk areas, the market adjusts through price signals and policyholder behaviour. The assumption is that if individuals and governments act rationally – by relocating, investing in mitigation, or subsidising insurance – market equilibrium can be restored.

Risk is treated as a technical problem solvable through better modelling, pricing, and regulation.

Uninsurable future THROUGH A risk 2.0 lens

With a risk 2.0 mindset, the ‘uninsurable future’ scenario is driven by a convergence of climate-induced hazards, systemic governance failures, and economic pressures that collectively push regions past a tipping point where insurance becomes unavailable, inaccessible, or unaffordable. Root causes include rising greenhouse gas emissions, sea-level rises, poor land-use planning, and socioeconomic inequality, which increase exposure and vulnerability to extreme weather events. As disasters grow more frequent and severe, traditional insurance models – based on historical data – struggle to price risk accurately. Reinsurance costs surge, data gaps persist, and insurers begin withdrawing from high-risk markets, leaving millions of properties without coverage. In Australia alone, over 520,000 homes are projected to be uninsurable by 2030[1].

The first-order impacts are immediate and severe: households face delayed recovery, rising debt, and mental health challenges. Property markets destabilise as uninsurable homes lose value and become difficult to sell or finance. This directly affects the banking sector, which relies on insured assets to secure mortgage lending. Without insurance, banks face increased credit risk, reduced collateral value, and potential defaults – especially in disaster-prone areas. These vulnerabilities can ripple through the broader financial system, undermining investor confidence and asset stability. Governments, meanwhile, are forced to act as insurers of last resort and absorb uninsured losses, straining public budgets and increasing debt burdens. The US National Flood Insurance Program, for example, is already over $20 billion in debt.

As insurance becomes inaccessible, inequality deepens: wealthier individuals and businesses relocate or self-insure, while vulnerable populations remain exposed. Feedback loops emerge as migration to cheaper, high-risk areas increases exposure, further driving uninsurability. These dynamics link to other systemic tipping points, such as ecosystem degradation and loss of space-based climate monitoring, which further erode resilience and risk modelling capabilities. The scenario underscores the urgent need for transformative approaches to climate adaptation, financial regulation, and collective risk-sharing to prevent cascading failures across social, economic, and ecological systems.

Food crisis through a risk 1.0 lens

Scanning historical data suggests local food crises are possible, but tend to be in low-income countries and to follow periods of drought. They are generally addressed by humanitarian relief efforts and have no discernible impact on asset prices. Food problems have been seen in high-income countries during times of war (rationing) or pandemic (temporary unavailability during COVID).

Looking forward, it would be reasonable to assign a higher probability to a disappointing harvest in a major breadbasket region of the world (e.g., climate change-induced drought, or war continuing in Ukraine). However, expectations would suggest high income countries would be able to afford to import the food they require at the higher prices. There could be a temporary negative impact on asset prices from a temporary spike in inflation (driven by food prices), but significant or lasting economic damage is highly unlikely. We therefore assign a low probability to this scenario, and a low to moderate adverse impact on asset prices.

Food crisis through a risk 2.0 lens

The global food system employs complex global supply chains, and “there are unprecedented levels of market concentration throughout global agrifood systems”[5]. A few companies control seeds, chemicals, pharmaceuticals, machinery, fertilisers, livestock genetics, food processing and commodity trading, and have potentially gained “market power”[6]. We would describe it as highly efficient but with very low resilience. It is highly dependent on the continued availability of fresh water, and continued deforestation (which is likely to disrupt the water cycle, let alone over-drawing from aquifers). Supply assumes, and is dependent on, the independence of weather across the world’s breadbasket regions.

Climate change challenges this assumption and we suggest that correlated poor harvests are now possible, if not probable just yet. Climate change also threatens to tip the Amazon from forest to savannah, which would remove a major rainfall source for a large part of South America, and likely interrupt rainfall patterns globally. In turn, this could strand existing agricultural infrastructure assets. The system is also exposed to any disruption in global shipping (Suez and Panama canal blockages/droughts, and war). Unlike the GFC, governments will not be able to bail out the food system by issuing “future food”. There is likely to be widespread social unrest, and possible direct action against the agri corporates and possibly the financial firms that fund them.

Given the lack of resilience in the food system, and the lack of action to address climate change, we are forced to conclude that – in the absence of new action – the probability of a food crisis will rise through time, until it becomes a near-certainty. At that point, the risk to financial asset values is very high.

“Safety is something that happens between your ears, not something you hold in your hands.”

– Jeff Cooper

We may be guilty of drawing boundaries around specific sectors in this piece, but the ultimate purpose is to show that a risk 2.0 lens allows those boundaries to dissolve as we recognise our hyper-connected global system.

The first step in answering “can risk 2.0 save us from crises yet to come?” is realising that while some crises carry a high probability, our awareness and preparedness can be radically improved.

There is no greater safety with risk 2.0, only better readiness.

Andrea Caloisi is a researcher at the Thinking Ahead Institute at WTW.

_{[1] UNU Institute for Environment and Human Security. 2023. Uninsurable future}

_{[2] Total GDP losses after taking feedback loops through the financial and social system into account would be expected to be significantly larger (ie multiples of the estimate of direct losses)}

_{[3] European Insurance and Occupational Pensions Authority. 2023. Policy options to reduce the climate insurance protection gap}

_{[4] Aggarwal et al. 2023. Sigma – Restoring resilience: the need to reload shock-absorbing capacity}

_{[5] IPES-Food (International Panel of Experts on Sustainable Food Systems). 2017. Too big to feed: Exploring the impacts of mega-mergers, concentration, concentration of power in the agri-food sector.}

_{[6] FAO. 2022. The future of food and agriculture – Drivers and triggers for transformation. The Future of Food and Agriculture, no. 3. Rome. https://doi.org/10.4060/cc0959en}

The £35 billion ($47 billion) Railpen will ramp up its infrastructure allocation and explore a foray into commodities, as the fund bedded down the protection against inflation as the most important portfolio objective in its latest strategic asset allocation review.

It was a priority driven by Railpen’s stakeholders who want the fund to better mitigate inflation risks without compromising real returns, according to director of total portfolio investments John Greaves.

“On a trailing three and five-year basis, inflation has had a really big impact on our real returns, because we only partially hedge inflation and it’s quite hard to find assets that are resilient to inflation shocks,” Greaves tells Top1000funds.com in an interview.

“We spoke to the board about their growth-matching mix, but they are pretty focused on the long-term real return generation and weren’t willing to take some return off the table to hedge inflation.

“So it was ultimately down to the growth assets to be more resilient to such an [inflationary] environment.”

In infrastructure, this means Railpen is investing more in core-plus and value-add assets to complement its existing core exposures which generate secure income. The fund is looking to boost the infrastructure portfolio from the current £1 billion to £2-3 billion in the next five years.

The fund will look to take on some development risks and grow smaller, quality infrastructure assets into the mid-market space where the fund will seek liquidity, typically within a 5-10 year hold period.

It has a strong home bias – aiming for around 75 per cent of its infrastructure portfolio in UK direct investments – and has significant exposure to assets with an energy transition theme. It also has pan-European partners for co-investment opportunities but doesn’t have exposures to the US or emerging markets infrastructure.

“It’s a nice feature of infrastructure that often there’s plenty of opportunities to develop assets that we’d see would be resilient to energy transition risk,” he says.

But the fund is hesitant about infrastructure debt. Despite it being a macroeconomically resilient asset class and throwing out attractive yields in a stable regulatory and policy setting, Greaves says that is a big ask in today’s world.

“We’re a bit mindful that any asset that requires a stable regulatory, political environment should probably be carrying a higher risk premium right now, because we just don’t think that’s the environment we’re in,” he says.

“You often get quite a small pickup [in infrastructure debt] for actually quite a lot of risk. If a government changes the rules of the game, the nature of a subsidy agreement for example, or other changes that underpin the value of the asset, then often it could be quite a big risk event.”

The fact that infrastructure debt is an area heavily bid by insurers also means the return is quite tight, Greaves explains.

“We’ve tended to invest in areas where there’s less cash flow certainty and less of an insurer bid,” he says.

“Right now it still feels like an environment where you want probably more of a barbell [approach] – buy inflation linked bonds and then invest up the risk spectrum in more of the growth infrastructure space.”

Commodities’ time to shine

Railpen recently received the nod from its investment committee to explore potential investments in the commodities universe. Greaves did not offer an expected allocation but it’s likely to be a small, controlled bet to begin with.

“We’re not going to put half the portfolio in it. It’s a complementary exposure that in certain environments hopefully would just give us a few per cent extra of return,” he says.

Gold, which has increased more than 60 per cent in the year to date, is likely to be a central part of the allocation. It’s a hedge to the fund’s underlying thesis that fiat currencies are becoming less reliable due to uncertain policies from global central banks.

“Most institutional portfolios are 100 per cent exposed to fiat currency. In our case, mostly British pound, but [others may have] dollars, euro and yen. Gold can help balance out the currency mix essentially,” he says.

“Do you want all of your exposure to be in paper money where central banks and policymakers have demonstrated in recent decades that maintaining purchasing power is not front of mind?”

Greaves clarifies the fund does not see gold as a long-term return driver but something to make the portfolio more resilient in environments where other assets may be struggling.

“Ultimately it has to outperform cash. It’s funded by cash and not funded by growth assets,” he says.

“Do we think a broad basket of commodities, and specifically gold, can outperform cash over the long run? Probably.

“Commodities have delivered about 2 to 3 per cent historically over cash and there’s no evidence that won’t continue. But equally, there’s not a clear economic rationale why it should outperform cash, really. So again, we have some very prudent assumptions there.”

The fund is still exploring the right implementation model, noting that while it has an internal trading capacity, commodities is an area where some market participants do have an information advantage, Greaves says.

“We’re comfortable running certain strategies internally. But we have some futures-based strategies which are implemented with external partners, just because they’re high-turnover type of strategies or where the contracts aren’t as liquid.”

Looking ahead, Greaves says Railpen is looking to build more portfolio resilience, which it defines as the likelihood of delivering its investment objectives over the rolling medium-to-long term.

“That’s the big thing this year, to have a better handle on what we can do over the medium term and to try and deliver on our objective in a wider range of outcomes essentially. We’re probably still at the start of that journey,” he says.

“It’s going to be very important in the coming decades to think about all these different possible scenarios. We think markets and the economy are going to be potentially pretty volatile.”

Railpen has 33 per cent allocated to equities, 8 per cent to fixed interest securities, 13 per cent to index-linked securities, 30 per cent to pooled vehicles and 7 per cent to UK property as at the end of 2024.

Pension funds in The Netherlands have kicked off 2026 by switching to a new defined contribution system, swapping the country’s defined benefit system and tying pay-outs to contributions and market returns instead.

Pension funds with assets accounting for almost a third of the country’s €1.6 trillion ($1.87 trillion) pension system have made the change. Another $1 trillion is planned to transition next year in time for the January 2028 deadline, in a complex process that has been 10 years in the making and involves navigating regulatory hurdles, IT issues and administrative challenges.

“The launch of the new scheme is good news for all participants and pensioners. We now have a pension that is more future-proof; can grow more easily in good times, and is still well-protected in bad times,” states Pensioenfonds Zorg en Welzijn (PFZW), the €250 billion Dutch healthcare fund, one of the funds to transfer to the new system.

Meanwhile, ABP, Europe’s largest pension fund with over €500 billion under management and accounting for around a third of the sector’s total assets under management, says it will transition to the new system in January 2027.

The reforms will allow Europe’s largest pension funds to buy riskier assets and move away from strategies that have favoured long-term interest-rate hedging and matching assets very closely to liabilities.

Many Dutch funds have run dynamic asset and liability management strategies where a matching and return portfolio, and an interest-rate hedging strategy, all moved in line with funding ratios. This investment approach, which has been encouraged by strict regulation steering funds to focus on short-term stability and guarantees rather than tilting towards risk-taking and long-term returns, has also thrived in a low-interest-rate world.

Impact on the bond market

But Europe’s largest pension sector is expected to push into riskier assets and buy less long-dated government bonds just as European governments face record funding needs.

Government bonds make up a significant portion of Dutch pension funds’ balance sheet. Research from ING Netherlands estimates fixed income accounts for €729 billion of the country’s pension sector; equities account for €439 billion, real estate €154 billion, private equity €95 billion, infrastructure €60 billion and ‘other’ investments €122 billion.

Many investors welcome the shift from “overdone hedging strategies” that have come at the expense of returns.

But any push into equities and riskier assets will depend on the risk preference of scheme members. Moreover, only pension funds with young beneficiaries are expected to change their asset mix and beef up their allocation to equities and alternatives and reduce their exposure to fixed income.

For example, Imke Hollander, senior advisor to the investment committee at PWRI, the €10 billion pension fund for people with disabilities, said the fund is on a de-risking trajectory because it doesn’t have many young participants joining despite it still being an open fund. Moreover, she said the pension fund’s risk appetite is unlikely to extend beyond an existing 50 per cent allocation to equity and real estate anyway.

In conversation with Top1000funds.com last November, outgoing chief executive officer Ronald Wuijster at APG Asset Management, which manages ABP’s giant portfolio, argued that structural changes are also essential to enable Europe’s pension funds to successfully take more risk in a continent where the capital markets offer thin pickings.

He listed roadblocks like Europe’s fragmented insolvency legislation, which differs between countries. The absence of a capital markets union also makes it hard for fast-growing companies to access the finance they need to grow and fire up a competitive European economy. European member states’ deeply-held national differences also thwart the prospect of a capital markets union alongside a deep psychology of risk aversion.

Under the Dutch reforms, pension funds will choose between two different types of DC schemes, either a “solidarity contract” where the fund decides on the investment mix or a “flexible contract” where the member can choose their own investment mix.

It means the new regulation will trigger a sharp uptick in compulsory communication with beneficiaries, as well as time-consuming board approvals for every change to ensure different stakeholders, including unions and employers, are on board.

CPP Investments says its internal trials show the power of generative AI has advanced so quickly that traditional workflows across core investment tasks could eventually be eradicated – but only with strict governance and clear operating frameworks.

The C$777.5 billion ($562 billion) Canadian asset owner ran three head-to-head experiments ranking autonomous agents – which work together like digital workers on complex tasks – against traditional processes:

Accurately reconciling a $522 million portfolio which contained hidden errors.
Conducting performance attribution.
Analysing a forward-looking tariff scenario.

The strong results suggest that AI can now do more than speed up workflows and processes; it will eventually redefine roles, jobs, and organisations themselves, according to Jon Webster, senior managing director and chief operating officer at CPP Investments.

“We have 2,100 colleagues who are engaging with the technology practically every day,” Webster tells Top1000funds.com. “As we see the opportunities moving forward, we are well positioned to listen to the team and then say, ‘this is now reaching the point where we could think about applying it in different ways than we have seen before’.”

A five-gate framework

Webster says the industry is trying to build reliable systems with non-deterministic technology (potentially delivering different outputs from the same inputs), making a nuanced, tailored approach is essential. He advises using a five-gate system which can impose clear discipline and lift results:

Frame: specify the problem and context.
Input: clean and validate the numbers.
Model: develop and/or run an analysis and flag uncertainties.
Validate: cross-check results.
Narrate: it must document every decision.

“If you are to naively copy off-the-shelf patterns that others are showing you, without engaging very diligently and thoughtfully in your context, with your requirements, with your reliability and consistency needs, that is likely to be the place where mistakes will be made and the results will be disappointing,” he says.

Process and quality control are crucial

This governance system and quality control – including verifying sources, normalising identifiers, and tracing every figure – proved crucial in lifting the AI’s performance in the position reconciliation test conducted by CPP.

It was clear that AI only performed well when the right human inputs, guardrails and oversight were in place.

While direct prompting caused AI models to disagree and miss critical errors, requiring the AI to rate its confidence in each finding (triggering human review when below a 70 per cent confidence level) meant accuracy was boosted by 45 per cent. Two AI models also cross-checked each other, and humans reviewed uncertain cases.

The second test – performance and risk attribution – also showed strong results with the right framework. The AI agents performed well given a clear problem, clean data, and explicit methodology. Without such precision, the AI could choose the wrong analytical approach, like using a monthly calculation rather than a daily one. Humans framed the problem and verified the results.

The third test required AI to model how semiconductor export restrictions would impact a globally diversified portfolio. Without clear human guardrails the AI predicted gains when there should be losses. A more careful combination of AI-human expertise produced a credible prediction of a 1.82 per cent portfolio decline.

Webster said this tariff scenario was a good example of how AI could help organisations become better investors.

“I don’t think we will become a better investor by simply doing our existing tariff scenarios better,” Webster says. “But maybe we’re able to run more scenarios, maybe we’re able to look at more edge cases, maybe we’re able to put more inputs into those to think about areas that we couldn’t have thought about before.”

A redefined future for humans

CPP Investments is not yet at the point where it will overhaul the structure of the organisation, Webster says, but the value of people in the investment chain will inevitably shift.

“I think it’s premature to say where value will migrate to. But intuitively, we expect value to migrate into organisational EQ [emotional intelligence]: trusted relationships with others, your standing in the environment,” he says.

Today, analysts do the research, portfolio managers decide, and risk teams validate. AI is compressing that sequence but may eventually reshape it completely.

Webster says the future may involve smaller teams organised around outcomes rather than departments with people acting as facilitators (who manage AI workflows), architects (who frame problems), and leaders (who make judgment calls).

Staff at CPP Investments continue to experiment, using AI tools from several major providers, particularly given the rapid pace of change and lack of existing roadmaps about how to use the technology.

“Which ones – if indeed we anchor on one in the long term – I think is unclear. They may evolve into different product market fits, and different capabilities may suit different parts of our teams, our investment approach.”

Large allocators favour established managers in impact investing for their proven track record, but foundations and insurers play a vital role in backing emerging managers and fostering a more mature impact market, according to a new report.

The study, released today, was jointly conducted by Institutional Limited Partners Association alongside consultancies Tideline and Campbell Lutyens, and includes interviews with more than 40 global LPs.

Already limited by risk tolerance and minimum mandate sizes, larger institutions tend to be hesitant about working with emerging managers as they require more time and internal resources for due diligence. They may also have to resort to proxies when financial and impact data is not readily available.

Ben Thornley, managing director of Tideline, which co-authored the report, said that it’s not always fair to expect large institutions to pour money into nascent strategies or managers despite their potential high impact.

“One of the things that I’ve seen a lot recently in the press is a consternation about impact, in the sense that people want to have their cake and eat it too,” he told Top1000funds.com.

“My response to that would be that the investors we’re talking about here are not trying to solve the world’s problems. They’re trying to contribute in positive ways and recognise that that may be at a system level, or it may be at the margins, or it may be a focus on a particular part of the market that is itself more mature.”

The report also found that early-stage funds dominate by number but not by assets under management, indicating the market’s youth. This is where what the Thornley calls “bridging capital” – which includes foundations, insurers, public sector funds and increasingly, high-net-worth individuals – can fill a gap.

These investors can support earlier stage funds because they have less constrained mandates, until managers develop a track record and mature to a point where they become a viable solution for larger allocators, said Thornley.

Their presence could also address a thematic imbalance; nearly 25 per cent of the report’s LP respondents exclusively focus on climate in their impact allocation and all respondents have at least some focus on the theme. “We’re seeing in Australia some movement among foundations to consolidate their focus on impact in a way to help build the market,” Thornley said.

“If we can start to segment a little more and recognise the different roles for different investor types, I think that will enable a more efficient matching of the demand for these kinds of investments with the supply.”

Some large asset owners have used creative allocation methods access subscale impact fund or strategies. One instance is Temasek’s $500 million commitment to LeapFrog, with the Singaporean sovereign wealth fund set to invest in multiple future funds from the impact private equity firm.

“It’s a single underwriting effort and diligence effort, but they’re able to deploy much more capital,” Thornley said.

“That’s a really unique and powerful market-building signal because, of course, it then enabled Leapfrog to have the certainty of that investment as they continue to develop their platforms.”

Fund of funds structures are another option but a less common one at this stage, Thornley said.

But there are many other actions large asset owners can take to catalyse the impact’s market institutionalisation, including signalling clear demand to the market.

For example, Japan’s $1.5 trillion Government Pension Investment Fund (GPIF)’s pivot to impact investing, formalised last May after the government instructed it to consider investing in social and environmental welfare in the domestic society, has sparked more impact integration in managers’ pitch for mandates.

Dutch pension fund ABP also flagged its goal to invest €30 billion in impact by 2030 with a primary focus on private markets, which Thornley sees as an “activation” to the market.

“In some sense, it’s clear that for folks who are really talented managers, who have been wanting to do this, can see that there’s a viable path to growing their businesses and ultimately attracting that kind of capital,” he said.

“They may fund an initiative from a market building organisation, an example of that would be Temasek helping fund the creation of Impact Labs at the Global Impact Investing Network… But it’s certainly not the expectation that every institution can or should be doing that.”

Other challenges identified by the report include data (with an abundance of information but little uniformity across standards) and infrastructure (a lack of secondaries markets and liquidity) in the impact market.