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Some of the world’s biggest pension funds are halting or reassessing their private market investments into the US, saying they will not resume until the country stabilises after Donald Trump’s erratic policy blitz.
The moves underscore how big institutional investors are rethinking their exposure to the world’s largest economy as the US president’s trade policy upends markets, adding pressure to America’s private capital industry which is under increasing liquidity strain.
Some top Canadian funds are backing away from taking on more US private assets because of geopolitical concerns and fears they will lose tax breaks on their American investments. Canada Pension Plan Investment Board, which has C$699bn ($504bn) in assets, is among those considering its approach.
Meanwhile, one of Denmark’s biggest retirement funds has paused new investments in American private equity because of concerns over stability and Trump’s threats to take over Greenland, an executive at the fund told the Financial Times.
“If some private equity funds come by and say ‘we have a great investment in the US’, we will say ‘no thank you, come back in half a year when things are more stable and foreseeable or we will have to take a big discount’,” the executive said.
Markets have swung wildly this month after Trump announced he would impose steep tariffs on America’s largest trading partners, before placing a 90-day pause on introducing some of the levies.
The executive at the Danish fund said that the US approach to Greenland, a semi-autonomous territory which Trump has put pressure on Denmark to cede control of, was “very hostile”. “It’s difficult to find a happy smile and just say ‘now we start to invest in that country’,” the person added.
Another Danish fund is also pulling back. Anders Schelde, chief investment officer at AkademikerPension, which manages DKr150bn (€20bn), said he was now discussing the attractiveness of US investments “on a daily basis”.
Schelde said he had started considering “pretty fundamental changes” to his portfolio which “could most certainly take us down a road with significantly less strategic exposure to US assets within a half year or so”.
Stephanie Lose, Denmark’s economy minister, told the FT that she was not aware of Danish funds changing their approach to the US. But she added that funds tended to scale back investments due to “risk and uncertainty” and that the decisions “might be a side effect of both tariffs and Greenland”.
CPPIB, Canada’s largest pension plan, is also becoming more cautious on its US infrastructure exposure for fear it could lose tax exempt status afforded to foreign governments and their pension funds, said a person familiar with the fund’s thinking.
Another person who has recently held discussions with the pension giant said it would be “incredibly difficult” for the fund to commit fresh capital to US private capital funds given the geopolitical backdrop.
CPPIB did not respond to requests for comment.
CPPIB owns significant stakes in more than 50 industrial, retail, office and residential properties across the US. It had close to $50bn of paid in capital to US dollar-denominated private equity funds at the end of September, including funds run by Silver Lake, Carlyle and Blackstone, according to FT analysis of public data.
A person familiar with the strategy of another large Canadian pension fund said there was “a lot of uncertainty” as to what type of infrastructure investments were welcomed by the Trump administration.
“If we don’t get comfortable with investing in the US for six or 12 months, we will reduce deal making . . . and then we will consider adjusting our strategy,” the person added.
Tensions between Washington and Ottawa have flared over tariffs and Trump’s suggestions that Canada should become the US’s 51st state.
But some Canadian pension funds expect their US private equity exposure to remain unchanged. Caisse de dépôt et placement du Québec, which has C$473bn of assets, said it thought half of its private equity portfolio would remain in the US.
“It’s tough to invest everywhere these days — geopolitics has become more complex . . . we intend to stay active in the US,” said Martin Longchamps, head of private equity and credit at CDPQ.
But he added that “tariff noise makes it harder to evaluate businesses and we have to take that into account until things settle down”.
Two top US private equity executives said they had begun to worry about Canadian investors making new investments in their funds.
While they had not yet seen any change in money flows, they said they thought Trump’s aggressive approach to Canada had angered the country and there was a risk that political officials would pressure the country’s large pensions to restrict new investment in the US.
Additional reporting by Robert Smith in London and Richard Milne in Warsaw
