The PPP Equity PIP fund, launched by the UK’s Pensions Infrastructure Platform (PIP) and managed by Dalmore Capital, has so far raised £260 million (€316 million; $434 million) from investors. It has a hard cap of £500 million.
Investors in the fund so far include British Airways Pensions, Pension Protection Fund, Railways Pension Scheme, Strathclyde Pension Fund and West Midlands Pension Fund.
PIP is a National Association of Pension Funds (NAPF) initiative, designed to offer UK pension funds low-cost access to long-term UK infrastructure investment. It has a target size of £2 billion (with other funds expected to be launched in due course) and targets low fees of around 50 basis points, low risk and long-term cash returns of Retail Price Index (RPI) plus two to five percent.
Speaking of the PPP Equity PIP Fund, NAPF chief executive Joanne Segars said: “This is a major milestone for the PIP and fantastic news for all UK pension schemes that have an interest in infrastructure investment. Investments will be targeted at meeting the PIP’s original aim to make infrastructure work for pension funds, offering investors low-risk, long-term investments providing inflation-linked cash flows.”
A source at the NAPF revealed that Dalmore has “a number of pipeline investment opportunities” including a first investment which has been agreed and is expected to complete within the next month. The deal involves a portfolio of more than 10 public-private partnership (PPP) and Private Finance Initiative (PFI) equity investments alongside a “large UK construction and services company”.
A further portfolio of 16 mature PPP assets worth around £160 million is also reported to be part of the Dalmore Capital pipeline for the early part of this year.
Formed in 2009, Dalmore Capital has £350 million in funds under management and reached a £130 million first close on its Dalmore Capital Fund in October 2012. In October last year, it paid around £70 million for stakes in 21 PFI schemes from Robertson Capital Projects.