TPA, the EMEA Way: Why EU and UK Asset Owners Are Exploring New Investment Approaches
In the fourth and final MSCI Institutional Investor Forum in 2025 — a global series that has spanned Tokyo, Sacramento and Toronto — asset owners convened in London on November 20 to discuss the ways in which they’re recalibrating their capital allocation strategies to best suit today’s increasingly changing macroeconomic and financial landscapes.
The conversations at the forum reflected how European institutional investors, alongside their global peers, are focusing less on where growth is concentrated and more on how to capture it within their own pension plan mandates. Senior investment and risk leaders at each of the four forum events noted that fragmenting market cycles and shifting policy regimes will prompt more deliberate assessment of where capital can be most effectively put to work in 2026 and beyond.
Rethinking capital deployment
The backdrop followed themes from this year’s North American forums, where long-standing anchors of market behavior — such as globalization’s impacts on public markets and private equity’s historical outperformance compared to other asset classes — are beginning to shift. This environment, the Sacramento and Toronto speakers agreed, demands both pragmatism and reinvention.
Like many of their peers globally, asset owners across the U.K. and Europe said at the London forum that they’re also rethinking their approach to diversification, moving beyond geography or asset class to focus on the quality and purpose of each exposure in their portfolio.
For certain pension funds in the region, this has meant a more deliberate approach to domestic investment. For example: An investment leader for one large U.K. scheme explained that simply setting a public equity allocation and performance target does little to drive real economic value in their fund’s country of domicile. Instead, this asset owner channels capital towards investments that link directly to employment and wage growth in the U.K. in order to support the economy in which their plan participants reside.
As the London forum speakers noted, this home bias approach presents a pragmatic balance between fiduciary duty and national growth priorities. This point of view harkens back to a broader point made about asset owners’ company culture by an American CIO at the Sacramento forum in October: Galvanizing an investment team around a pension plan’s overarching mission to secure the financial futures of retirees can lead to stronger collaboration and creativity between investment and risk leaders.
Both firms have implemented a total portfolio approach (TPA), but they are doing so in different ways. While the U.S. CIO told Sacramento forum attendees that his firm maintains asset class specialist groups, the U.K. leader explained that their plan instead created new, broad investment sleeves for the total fund, such as developed and emerging markets. By organizing their total fund in such a way for several years, the speaker said they have reduced behavioral and benchmark bias among investment teams that must work closely together under this particular TPA.
The contrast highlights a point made by MSCI Research & Development leaders and participants at all four MSCI Institutional Investor Forum events: While more asset owners worldwide have adopted TPAs in recent years, each fund’s implementation is unique and context-dependent.
Pragmatic about resilience
Climate and physical risk are also shaping this renewed focus on productive capital. Asset owners at the London forum said that they are looking beyond decarbonization targets to assess how portfolios will withstand transition and physical climate stress.
Several investment leaders at the event described how they were now analyzing their portfolio companies with forward-looking transition metrics. These asset owners also said they felt engagement with portfolio companies and investment stewardship as effective tactics for understanding how their portfolio companies are navigating the energy transition.
Infrastructure featured prominently across conversations about the future of energy transition and private assets investing. Participants highlighted how assets such as renewable grids, storage networks and data centers form the backbone of both energy transitions and technological innovations. Yet, as several noted, these assets face significant vulnerabilities around power and water supplies, policy shifts and exposure to physical climate hazards over long-term horizons.
A study by MSCI and Swiss Re Risk Data Solutions, shared during the forum, examined physical risk in the listed-equity portfolios of 18 global asset owners. It found that most institutional portfolios contain assets exposed to at least two climate hazards, underscoring why adaptation and location-specific resilience are now increasingly investment imperatives.
Agility as a defining advantage
This shift in how capital is being deployed is also reshaping how asset owners manage their portfolios, with some British and European plan leaders saying that recent market volatility and regime changes suit a TPA.
Discussions at the London forum showed that investors are re-examining decision processes, governance structures and the use of technology to navigate increasingly dispersed markets. The emphasis has moved from static allocation target-setting to dynamic portfolio management that enables teams to identify where risk and opportunity are emerging in real time and responding with greater precision.
Artificial intelligence is becoming central to that evolution, investment leaders said. While many asset owners still see its greatest near-term benefits in operational efficiency, others at the London forum said that they are now exploring research and alpha-generation applications.
One global manager described using big-data, machine-learning models and generative AI to develop proprietary investment insights and tools while underscoring the importance of combining these insights with human expertise to test and refine them before they inform portfolio decisions.
MSCI’s Institutional Investor Forum participants around the world were also asked how far they have progressed in applying total-portfolio thinking. Poll results showed that most asset owners at each event have implemented at least some elements of a TPA, reflecting the rising demand to connect exposures, risks and objectives within a single risk and opportunity framework.
In the U.K. and Europe, this shift is visible in how institutional investors are aligning governance to investment objectives, and organizing portfolios around outcomes such as growth and resilience rather than asset class-based return targets. Several London forum-goers described how this structure provides agility to adjust allocations as correlations and risk premia shift.
A more connected, total-portfolio view allows capital to move where it is most effective, some London forum-goers argued. Linking public and private exposures within a single system of decisions allows for flexible asset allocation, one speaker explained further. The ambition, as this investment leader framed it, is to become “less dependent on the future looking like the past,” and more confident in adapting when it doesn’t.
Catch up on key highlights and insights from this year’s global forums by visiting our MSCI Institutional Investor Forum page.