Names of 400 firms including Palantir were missing from Nest halal pension tracker
‘Issue’ involving ‘third-party data’ led to sharia savers being unaware for months that their cash had been invested in the spy-tech firm
The UK’s largest workplace pension provider has admitted that it failed to tell tens of thousands of sharia savers that it had invested their money in Palantir and more than 400 other companies this year due to a months-long glitch.
Hyphen can reveal that 408 investments held by the Nest Sharia Fund were missing from Nest’s online transparency tool between 23 March and 27 October, including the one in Palantir, which struck a strategic partnership with Israel’s Ministry of Defense (MoD) during the war in Gaza.
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Muslim retirement savers who checked Nest’s online investment information tool during that seven-month stretch would only have been shown 99 companies, about 20% of the total.
The issue arose after the HSBC Islamic Global Equity Index Fund, in which most of the cash in Nest’s sharia scheme is invested, switched to tracking a new parent index — a ready-made group of stocks screened for sharia compliance by third party providers — on 23 March. The HSBC fund is “passively managed”, meaning it mirrors its parent index as closely as possible, and as a result it made an array of new investments.
They included $38m worth of shares in the spy-tech firm Palantir, as revealed by Hyphen in October, sparking a backlash in Britain and a commitment by HSBC to review the investment.
Nest only investigated the discrepancy after the missing investments were flagged by Hyphen. It said it had “identified an issue with how third-party data was being produced and uploaded” and has now fixed the issue.
The workplace pension provider set up by the UK government, which reports to parliament through the work and pensions secretary, has no plans to proactively inform customers about the huge increase in its sharia investment portfolio. Other materials on Nest’s website make clear its sharia scheme is 69.7% invested in the HSBC fund, but do not give a full breakdown of its holdings. The Nest Sharia Fund had 33,139 users as of July 2025.
Labour MP Afzal Khan, vice chair of the all-party parliamentary group on British Muslims, said: “The fact that Nest’s Islamic fund is refusing to actively inform customers that their investments have funded companies like Palantir, who have actively aided the IDF as it commits war crimes in Gaza, shows that they clearly don’t care about the values of their Muslim investors.
“I think it’s deeply disappointing to see Nest purport to be following Islamic financing rules when they clearly do not.”
Palantir signed a partnership with Israel’s MoD to provide it with “advanced technologies in support of war-related missions” in January 2024.
The spy-tech firm sells software to customers, including governments, police forces and militaries to help them sort through large datasets — including systems that help soldiers to identify targets for military strikes, as part of what it describes as an “Al-powered kill chain”. Responding to a heckler’s claim that Palantir’s “technology kills Palestinians” during an event in 2025, the company’s co-founder and chief executive, Alex Karp, replied: “Mostly terrorists, that’s true.”
Dr Wajid Akhter, secretary general of the Muslim Council of Britain, said: “Ethical considerations guide decision-making for many British Muslims, from tackling climate change, to opposing assisted suicide, to pensions and financial investments.
“But to enable informed decisions, fact-based debate and constructive advocacy, it is crucial that all parties involved — including pension providers, as well as fund managers like HSBC — ensure transparency with how and where they are investing money entrusted to them.” He added: “We recognise that fund managers often have several hundred companies in each fund to keep on top of through their screening, but more needs to be done to ensure that ‘sharia’ or ‘ethical’ do not become simply sticky labels applied to a standard fund.”
The scandal has sparked fresh debate about whether the Islamic finance sector’s sharia screening guidelines are up to scratch.
Firms can be sharia-complaint if no more than 5% of their total income comes from sources deemed impermissible, with profits from haram sources donated to charity. But those standards focus on business activities involving alcohol, gambling, weapons and payment of interest. Tech companies are often deemed sharia-complaint, but the scholars who approve sharia investments are now being urged to consider whether their products are being used to harm or oppress people.
A 2025 investigation by Hyphen found that six Islamic investment funds, including HSBC’s, held shares worth more than $1bn in firms whose technology had reportedly helped Israel’s war effort in Gaza — meaning British Muslims had likely been unknowingly profiting from the conflict.
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Paul Todd, chief operating officer at Nest Invest, said: “We are sorry an issue with our online tool that helps Nest members see more information about the investments held across our funds meant that some underlying investments were not displayed as they should have been. We regret this was not identified sooner and are grateful it has now been brought to our attention. As soon as we became aware of the issue, we investigated it as a matter of urgency and put a fix in place.
“We understand the strength of feeling on this issue. Our members need to be able to trust the sharia fund reflects the principles for which it was designed. Nest invests through HSBC’s Islamic Global Equity Index Fund, whose underlying investments are screened for alignment with Islamic investment principles through HSBC’s independent sharia governance arrangements. We have raised members’ concerns about companies linked to defence and conflict at the most senior level with HSBC, which is reviewing the matter with independent expert advisers.
“We take the concerns raised by Mr Khan and our members seriously. We will continue to press HSBC on both alignment with Islamic investment principles and our members’ expectations and are discussing potential changes to the equity strategy it manages on their behalf. Once the nature and implications of those changes are clear, we will consider how best to update our members.”
