London, 17 February 2026 – UK institutional investors representing nearly £1.7 trillion in assets under administration maintain established public market allocations to emerging and developing economies (EMDE), but see private markets as a largely untapped opportunity, according to a landmark report published today by the EMDE Investor Taskforce.
The report – EMDE Investment Through the Asset Owner Lens: a 2026 UK Landscape Report – draws on interviews with 18 major UK pension schemes and insurers, including open defined benefit schemes, defined contribution providers, and annuity providers. It represents the most comprehensive assessment to date of UK institutional investor sentiment toward EMDE opportunities.
Key findings include:
- All investor categories maintain allocations of 5-10% to EMDE public equities and debt, recognising these as essential components of globally diversified portfolios.
- Private market exposure amongst asset owners to EMDEs remains minimal (<1% of portfolios), with investors citing a higher implementation burden versus developed markets – linked to fragmented market structures, legal and enforcement uncertainty, limited trusted intermediaries, and the level of specialist due diligence required to invest with confidence.
- Investors unanimously emphasised that any capital reallocation must deliver competitive risk-adjusted returns whilst remaining consistent with fiduciary duty.
- Climate and sustainability ambitions are increasingly viewed as strategic portfolio resilience factors rather than purely moral imperatives.
- Clear policy framing from UK Government positioning EMDE and domestic investment as complementary objectives would strengthen investor confidence.
The UK Government is shifting our approach to international development from simply being a traditional aid donor to becoming a partner and investor. The EMDE Investor Taskforce – working alongside the UK’s world-leading financial sector – is central to this shift. This vital report from the Taskforce shows that there is appetite from the UK financial sector to invest: the challenge is how we can meet this. The Taskforce’s practical recommendations will help attract the private investment needed to support climate action and economic development in the places that need it most, while also creating jobs and growth here in the UK.
“The message from UK asset owners is clear: EMDEs matter strategically, but capital will only flow at scale if fiduciary requirements can be met in practice. Investors need policy clarity, robust data, credible and scalable investment structures, and support to build capacity to correctly assess risks and opportunities in these markets. If those building blocks are put in place, EMDE investment has the potential to strengthen portfolio resilience for UK savers and accelerate the climate and infrastructure investment these economies urgently need.”
Interviews revealed that whilst investors maintain long-standing public market allocations through benchmark-aligned strategies, private markets remain largely unexplored territory. Barriers include fragmented market structures, inconsistent legal frameworks, currency hedging costs, and limited local expertise among smaller schemes. However, respondents indicated openness to collaborative platforms, pooled vehicles, and MDB-backed structures as mechanisms to de-risk early participation.
On climate integration, all institutions surveyed maintain net zero by 2050 commitments, yet most have not embedded EMDE-specific transition pathways into asset allocation frameworks. Sustainability ambitions are no longer seen purely as a moral or reputational imperative, but as a strategic lever for long-term portfolio resilience and value creation. However, a key paradox persists: risk‑based assessments tend to penalise EMDEs for higher physical and transition risk exposure, potentially restricting capital flows to the very markets most in need of investment to support global climate stability.
The report identifies several actionable recommendations across four pillars: policy and regulation, research and development, data and toolkits, and product development. Among these, the Taskforce is advancing work on an Asset Owner EMDE Toolkit, alongside efforts to investigate and strengthen the data infrastructure needed to support investors allocating to EMDE assets.
Further workstream outputs are expected throughout 2026, including a forthcoming report on UK asset owner contributions to EMDE climate transitions titled Baku to Belem and Beyond.
ENDS
Note to editors:
- Scope: Interviews with 18 UK asset owners/insurers covering DB, DC and annuity/PRT providers; responses anonymised and aggregated; findings should not be treated as official views of any individual organisation.
- Scale: Nearly £1.7tn AUA across interviewed organisations.
ABOUT
The Emerging Markets and Developing Economies (EMDE) Investor Taskforce is an industry-led initiative convened by the Minister of State for International Development and the Economic Secretary to the Treasury. The Taskforce brings together public and private sector stakeholders to develop practical solutions that will support institutional investors in pursuing investment opportunities in EMDEs to help deliver economic growth and tackle climate change.
Contact: media@EMDEInvestorTaskforce.org