Nest has selected Blackrock’s Aladdin to manage the risk of its entire investment strategy on a single platform.

The UK’s largest workplace pension scheme by members, Nest highlighted the management of key investment risks as a “crucial part” of its long-term plan to continue evolving its investment strategies across both public and private markets.

The whole portfolio view and Aladdin climate components of the Aladdin platform aim to allow Nest to monitor more than 3,000 risk factors across fixed income, equity, foreign exchange, and private markets, and quantify the financial impact of climate-related risks.

This is expected to help Nest build a more resilient portfolio and enhance its capability to undertake greater and more sophisticated risk analysis.

Commenting on the partnership, Nest head of market risk and asset allocation, Jiwei Dong, commented: “The complexities facing a sophisticated portfolio like Nest’s are significant. It’s crucial we upgrade our services in line with our projected growth to be a £100bn scheme by the end of the decade.

“Just in the past few years, we’ve expanded our investable universe to include more illiquid assets while also adopting more complicated public market investment strategies.

“Aladdin allows us to get a holistic view on risk profiles of our multi-asset portfolios, and fully integrate environmental, social and governance (ESG) factors within our risk management process, matching the level of complexity we need.”

Adding to this, BackRock head of UK, Sarah Melvin, stated: “Nest plays a crucial role in supporting over 12 million people in the UK saving for their retirement.

“We share a joint purpose of helping more and more people experience financial well-being, so are delighted to be deepening our long-standing partnership.

“We are proud to have been chosen by Nest to provide enhanced analytics through Aladdin’s investment risk and Aladdin climate platforms, which will in turn help them to serve their members better.”

Read more @pensionsage