City of London Corporation has awarded IFM Investors a £45 million (€53 million; $73 million) mandate.
The commitment was made through the municipal body’s Pension and Bridge House Estates funds, which respectively manage £720 million and £470 million of assets.
“IFM Investors’ open-end fund structure and focus on investing in long-lived, core infrastructure really stood out for us, as did being able to invest in an existing portfolio of cash generating assets with exposure to the UK,” said Paul Mathews, corporate treasurer at the City of London Corporation, in a statement.
Such assets include Manchester Airports Group, the largest UK airport operator, Anglian Water, the fourth-largest water supply and sewage company in England, and Arqiva, the largest UK broadcast and wireless infrastructure business. The firm also exited Wales & West Utilities, a gas distribution company, in October 2012.
The mandate it just received is one of the largest ever awarded to an infrastructure manager by a British pension. It follows the £35 million pledge received by IFM from Leicestershire County Council Pension Fund in 2012.
Other UK pensions have accessed the infrastructure asset class directly, as exemplified by the 9 percent stake in Heathrow bought by Universities Superannuation Scheme this week.
“Infrastructure is an increasingly important asset class in portfolios, with its attributes for matching long-term liabilities particularly compelling,” Mathews said.
The City of London mandate comes at a busy time for IFM. Just as it rebranded from Industry Funds Management to its current name, the firm hired Eddy Schipper as head of its new Japan office at the beginning of the week. Earlier this month it also tasked Rich Randall, recently appointed as executive director of debt investments, to spearhead the unit’s development in North America.
Founded in 1990, IFM is owned by 30 Australian pension funds and has offices in Melbourne, New York, London, Sydney and Berlin. It currently has a total of £28 billion under management, including £12 billion of infrastructure equity and debt assets.