Pensions Infrastructure Platform sets out funding plan

25 Apr 16

A pensions investment initiative, which includes two council schemes, has set out its first £125m funding plan as part of a drive to boost infrastructure investment.

The multi-fund Pensions Infrastructure Platform (PiP), which has Strathclyde Pension Fund and West Midlands Pension Fund as founding members, today announced the creation of a multi-strategy infrastructure fund that will target housing, hospitals, schools and flood defences.

Other members of the PiP, which was first formed in 2012, include the Pension Protection Fund and the Railways Pension Scheme.

The fund will invest directly in UK infrastructure with the objective of producing the stable, long-term inflation-adjusted yields required to meet pension liabilities. Each fund has been asked to contribute £1m to the fund.

PiP chief executive Mike Weston said reaching close on initial contributions to its first fund was another key step in the development of PiP.

“The founding investor pension schemes, which have supported PiP from its establishment, have now achieved their objective of providing pension schemes of all sizes with an efficient route to direct ownership of infrastructure assets to enable greater access to infrastructure investment,” he said.

“This first close demonstrates that investors believe PiP works and is delivering on its promise. The founding investors have trusted the PiP team to use a portion of their scheme assets to source and take direct ownership of UK infrastructure assets on their behalf. This first close, and the acquisition of infrastructure assets that will follow, demonstrates that PiP is a credible force in UK infrastructure investing.”

Overall, PiP has a target to invest a minimum of £2bn in UK infrastructure, and it is hoped the multi-strategy infrastructure fund will eventually reach £1bn in size.

PiP is focused on low-risk investment in infrastructure assets, with an aim to deliver long-term index-linked cash flows of the retail prices index of inflation plus 0-2%, and RPI plus 2-5%, to suit the differing investment strategies of individual pension schemes.

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