Travers Smith's Alternative Insights: The disruptor is disrupted

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KEY INSIGHTS

Alternative Insights Summit 2026: In London last week, Travers Smith's clients and friends convened to discuss the key issues of the day in the private markets.

Increasing access to private market returns: One theme was the need for UK pension funds to take more advantage of the returns available, while sponsors should approach the wealth market with transparency, good governance – and without over-reliance on potentially fickle capital.

Defence is a vital opportunity: With Europe on a war footing, defence offers compelling returns across technology, infrastructure and supply chains – but government must provide faster procurement, clearer contracting and stronger demand signals to mobilise private capital at scale.

A regular briefing for the alternative asset management industry

Last week in London, Travers Smith hosted its 5th annual Alternative Insights Summit. Our theme was "disruptors and the disrupted" – a theme which meant we had a lot of ground to cover! We discussed political and geopolitical disruption – brilliantly covered by speakers that included former Danish Prime Minister and Secretary General of NATO, Anders Fogh Rasmussen, and former director of economic policy at the White House, Todd Bucholz. We also tackled thorny issues closer to home: how to get more pension funds to invest in private assets, how to get more private assets invested in European defence, and whether and how the industry should take money from individual investors.

Dame Anne Glover began the day with a call for UK pension funds to invest more in early-stage venture capital. They are missing out on the returns available from backing early-stage businesses, she said, especially the huge potential of technology and AI.

There are encouraging signs. Later in the day, in the context of funding infrastructure investment, we discussed the welcome moves to consolidate UK defined benefit pension schemes. We applauded the UK's new LTAF structure. We noted the government drive to push pension funds – by compulsion if needed – to invest more in private assets. But the UK is way behind Canada and Australia. It's clear that more needs to be done, and asset owners need to step up.

The discussion on direct access by individuals – what many refer to as "retailisation" – was more cautious. Jen Choi, CEO of ILPA, presented the institutional LP perspective on evergreen funds, highlighting some concerns. The following panel addressed those head on, and all agreed that the wealth market should be approached with care and complete transparency. Not all GPs should do it, and those that do should not become too reliant on it – individual investors may prove more fickle than their traditional LP base.

The advice from our speakers was to stop using the moniker "semi-liquid", because at times liquidity will be more constrained than some investors will understand by that term. And, as Head of Disputes Heather Gagen reminded the audience, litigation risk is real. Litigation funders and claimant law firms will focus on valuations and conflicts of interest. Mis-selling is a clear risk, and working with an intermediary adds another layer of concern: sponsors might have liability risks even though they don't have full control of the sales process. Good governance is key to defending the almost inevitable claims.

"This is more than an embarrassment: it is an emergency."
Anders Rasmussen comparing Russian defence spending with that of Europe

We also explored how private capital firms are expanding internationally – building sophisticated operating models across multiple jurisdictions, not just opening offices – and the resulting challenges across talent, incentivisation and governance. The panel — featuring leaders from Apollo, Bain Capital and Vitruvian — discussed the joined-up thinking needed on tax and regulation to get that right.

On the day of the Makerfield by-election in the UK, we had some spectacular analysis of British politics. We didn't know then that Andy Burnham would win, but the smart money was already on him becoming the next Prime Minister. It is not easy to predict what that might mean for private markets, but there was no expectation of a dramatic change of government policy, even if the personalities change. Tax rises for higher earners and on capital gains seem a little more likely, as does more regulation of private enterprise. In any event, the underlying challenges will not go away, so there was little optimism that any renewed stability will last long.

Political uncertainty and regulatory changes shaped our panel on infrastructure. Investors prioritise capital protection in due diligence, and support from regulators is crucial. Partnering with government to meet policy aims is key. Energy transition, strongly backed by European governments, remains a strong investment theme.

Defence investing is another investment theme that occupied much of the afternoon's discussion. Anders Rasmussen gave a stark message: Europe should be on a war footing. Consequently, his view was that there would be no better returns than from investments in defence. Now that the politicians have been clear that more investment is needed, there is a strong commercial logic to the investment thesis.

So, the question we then addressed was whether the private markets are fully invested in Europe's defence. Kerry Baldwin, co-chair of the MoD’s Defence Investors Advisory Group and herself a seasoned investor, gave a clear answer: no, not yet. Kerry surveyed the broad range of investable opportunities in defence, pointing out that these cover a wide range of private market strategies. Technology, obviously, but also long-term capital that enables supply chain resilience, infrastructure and contributes to energy security.

But the public sector also plays a vital role in mobilising private capital. VC firms are well placed to invest in innovative tech but need the government to provide faster adoption and contracting mechanisms. Growth capital and buyout firms need clear procurement processes and signals for their risk, compliance and investment committees. Long-term contracts are needed for infrastructure funds.

The UK government is consulting with the industry over the coming months to understand what it needs to do and the granular details that are needed to progress investment opportunities. (Let us know if you would like to be put in touch with Kerry to share your internal processes and required demand signals.)

So, on a warm Thursday in June in central London, our clients and friends convened to discuss the key issues of the day. And although there are many challenges ahead, there are exciting opportunities too. Indeed, it was pleasing to note that when we asked our audience: "Would you encourage a young person today to make their career in private markets?", the answer was a resounding and unanimous Yes!

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