The latest results from Nuveen’s EQuilibrium survey point to an expansion into niche areas of private fixed income. Sponsored comment from Nuveen.
Over the past five years, the annual EQuilibrium survey of global institutional investors has chronicled a period of significant change, marked by economic shifts, geopolitical uncertainty and the evolution of private markets.
In 2025, institutional investors are adapting with greater agility, giving them more flexibility to pursue growth opportunities. In this new environment, we see three themes becoming increasingly apparent:
- Geopolitical uncertainty remains
- Investors are shifting to private fixed income
- Environmental targets remain important but investment sentiment is becoming more pragmatic, particularly on the energy transition.
Geopolitical concerns remain high
Perceptions of uncertainty related to geopolitical tensions and monetary and fiscal policy have eased only slightly, while uncertainty levels surrounding capital markets and economic growth declined compared with the 2024 survey. Reflecting ongoing geopolitical concerns, institutions are:
- Assessing the adaptability of companies and sectors to changing regulations
- Evaluating direct and indirect country exposures, including supply chains
- Adjusting sector exposures with both defensive and opportunistic strategies
- Reevaluating overall portfolio diversification to mitigate risk.
Embracing private markets
Private fixed income is gaining momentum. In 2024, investment grade public fixed income was the most popular planned allocation. However, in 2025 private fixed income was the most popular planned allocation, with 44% of global respondents planning to allocate.
Investors have also shown an increasing appetite to diversify within their private allocations, such as private asset-backed securities, net asset value lending and energy infrastructure credit.
This shift towards private fixed income is reflective of the continued move towards private markets more broadly. Allocations across private markets are growing, with 92% of respondents holding both private credit and private equity in portfolios. This figure has increased each year since 2021.
70% of all UK survey responses say they factor in the energy transition when making investment decisions
In the 2025 survey, 66% of all respondents planned to expand their private market allocations over the next five years. This number jumped to 71% for UK-based responses.
Private credit remains top of mind for investors, with respondents from the UK and US showing the most interest with 52% and 60% respectively (and UK pensions at 50%).
UK-based results show private equity and private infrastructure as other top areas of interest, with more than half (51%) of all UK respondents planning on increasing their allocations to both private equity and private infrastructure in the next two years.
Allocations differ with UK pensions as 39% plan to increase allocations to private equity and 48% to private infrastructure.
Infrastructure has grown increasingly popular among investors in recent years, driven in part by the asset class’s long term opportunity in the transition to a low carbon economy. The trend remains important to UK investors, with 70% of all UK survey responses saying they factor in the energy transition when making investment decisions. This number rose to 76% for UK-based pension funds.
The survey results illustrate how this move into private markets is changing the structure of investment teams. Investors who have larger portions of their portfolios dedicated to alternatives are more likely to have specialised private investment decision-making groups.
Those with alternative allocations below 20%, for example, are twice as likely to manage private infrastructure debt in their general fixed income team compared with investors with higher alternatives allocations. But, overall, most institutions believe their expansion into private markets is enhancing their investment knowledge and decision-making capabilities.
Environmental goals remain a priority
Respondents showed a shift in sentiment regarding the energy transition, with 61% globally agreeing that a switch to a low carbon economy is inevitable, down from 79% in 2022. However, UK investors remain more optimistic, with 75% of all UK respondents saying a transition to low carbon is certain. Again, this number was higher for UK pension funds, with 78% agreeing to the statement.
This shift reflects a growing pragmatism surrounding the energy transition, underlined by the 73% of all surveyed investors who believe that meeting the growing demand for power will require both renewable and fossil fuel energy. In the UK, 69% of surveyed responses agreed brown and green energy will be needed, though this number jumped to 83% for those answering on behalf of UK pensions.
A growing area of interest for institutional investors is nature-based investment strategies, though this approach remains in its infancy for many. In the UK, 55% of surveyed investors agreed that nature loss is within the top five of economic risks, compared with 45% globally.
While the threat is recognised, only 37% of all UK-based respondents say they are increasingly focused on nature-related themes in portfolios, underlining how tackling nature loss still very much in the educational phase for investors.
Most institutions are prioritising clean energy and carbon reduction, either as part of net zero goals or to capture compelling risk-return opportunities.
Overall, 44% of institutions have net zero commitments while another 25% plan to in the coming 12 months. Even among the roughly 30% who do not intend to set net zero commitments, the majority (64%) say they are still investing in clean energy strategies or reducing carbon in their portfolios. There is higher uptake in the UK, where 62% of respondents (67% UK pensions) have commitments in place, and a further 24% (17% UK pensions) are planning to make commitments in the next 12 months.
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800 global institutional investors representing $19tn in assets were surveyed in October and November 2024. Of this total, 110 were UK institutional investors, 63 of which were from UK pension plans. Only investment decision makers were included.
