Border to Coast Pensions Partnership (B2C), the United Kingdom's largest local government pension asset manager, is cutting the weight of its US equity exposure because of concerns about concentration in the technology sector, Joe McDonnell, the firm's chief investment officer, said at a Reuters investment conference in London.
B2C manages roughly £120 billion of assets (about £120 billion ≈ HUF 48,600 billion). McDonnell said the firm could reduce its US exposure by as much as 10%, reallocating the freed capital toward Europe and Asia. The move reflects worries that a small number of large technology companies have become an outsized share of US markets amid recent enthusiasm around artificial intelligence, increasing portfolio concentration risk.
McDonnell did not disclose the current precise level of US exposure but noted that B2C still sees attractive opportunities in US private markets.
Caution toward retail-facing private credit funds
B2C is deliberately avoiding private credit funds that are also marketed to retail investors. McDonnell said concerns have arisen at several larger funds about lending standards, and a swift withdrawal of retail capital could trigger significant market volatility. "We don't want to lend to or invest alongside partners whose unpredictable actions could introduce uncertainty into our portfolio," he said.
B2C aims to keep its private market investments clearly separated from the retail segment.
Market context and outlook
Private equity and credit funds are under increased scrutiny generally: the Swiss firm Partners Group, for example, imposed withdrawal restrictions on one of its $8.6 billion funds. McDonnell suggested that listed private equity firms may face further criticism but added that, absent a large economic downturn, current market tensions could ease within six to nine months.
Private market investment plans
Over the next five years, B2C plans to commit about £20 billion to private market investments, matching the amount it deployed in the previous five-year period. This commitment forms part of a broader strategy to reduce concentration risk tied to US liquid markets and to increase regional diversification.
Why this matters
B2C's actions highlight a growing caution among major pension investors: concentration in a handful of technology stocks and liquidity risks in private market products can affect long-term returns and portfolio stability. The steps taken by a leading pension manager signal that institutional investors are actively managing these risks by rebalancing geographic exposures and avoiding products that could introduce retail-driven liquidity shocks.
This article is not investment advice or a recommendation.
