Consultants join discussions with UK government

UK pension fund consultants Mercer, Towers Watson and Hymans Robertson have joined the group of pension funds, investment funds and advisers meeting regularly with the government to find an effective way of allocating greater resources to infrastructure projects.

Mercer, Towers Watson and Hymans Robertson – three of the largest and most influential conduits of pension fund money in the UK – have joined an existing group of pension funds and investment managers advising the UK government on channelling capital into infrastructure projects.

The existing group, representing £65.0 billion (€78.0 billion; $102.6 billion) of total funds under management, includes the likes of Meridiam Infrastructure Managers (Meridiam), the London Pension Fund Authority, the Greater Manchester Pension Fund, Hermes GPE and Pantheon. They entered into a Memorandum of Understanding with HM Treasury last year to find ways of generating more investment in both the construction and operational phases of projects.

A press notice issued by Meridiam said that subjects covered in the group’s proposals included “support for investing in the earliest stages of construction investment, subject to the existence of appropriate project risk mitigation arrangements, the development of a local investment focus for infrastructure development and the attraction of inflation-linked equity and debt investment”.

The notice also said that the impact of new European Union regulations had been discussed, as well as national regulation impacting the ability of pension funds to invest in infrastructure.

Meridiam’s Julia Prescot said: “We have been pleased to engage with the government on a series of issues including correcting the misunderstandings that pension funds are not prepared to invest in the construction phase of infrastructure projects.

“Useful exchanges have taken place as to how best to structure future infrastructure investment as part of the government’s £170 billion National Infrastructure Plan and to mobilise infrastructure development accordingly.”