Five council pension schemes set up £250m local investment fund

24 May 13
Five local authority pension schemes are forming a £250m investment fund to back infrastructure projects that will boost local economic growth.

By Richard Johnstone | 24 May 2013

Five local authority pension schemes are forming a £250m investment fund to back infrastructure projects that will boost local economic growth.

The schemes – Greater Manchester, West Yorkshire, West Midlands, South Yorkshire and Merseyside ­– are now seeking to appoint an investment manager for the initiative.

Announcing the plan, the pension schemes said they want to identify projects that meet their investment criteria and benefit local communities. Each fund will initially provide up to £50m.

Investment could be available for roads, energy, water, waste and regeneration projects.

The initiative follows last October's report by the Smith Institute think-tank, which urged pension funds to pool their assets. It also comes after local government minister Brandon Lewis announced a ‘root-and-branch' review of the Local Government Pension Scheme investment regulations, including an examination of the case for merging the 89 funds in England and Wales.

Kieran Quinn, the chair of Greater Manchester Pension Fund, said the schemes had an ‘overriding responsibility’ to make a financial return to meet their pension liabilities without taking unreasonable risks.

But there were clear 'investment opportunities that will also deliver an impact on local communities that improves their economic wellbeing’, he added.

‘Funds have taken a number of such investment opportunities and this initiative is not only to establish the depth and breadth of the current market, but to challenge asset managers to bring opportunities forward on sufficient scale to match the investment allocations pension funds are prepared to commit.’

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