Foresight expands beyond renewables with PIP acquisition

The move comes eight years after the Pensions Infrastructure Platform was founded with support from the UK government.

Foresight Group has broadened its infrastructure remit following the acquisition of UK pension investment vehicle Pensions Infrastructure Platform.

Foresight, which has predominantly invested in renewable energy, agreed the move last week following a process that began at the turn of last year, according to Nigel Aitchison, head of infrastructure at Foresight Group. It immediately boosts Foresight’s assets under management by £1.8 billion ($2.2 billion; €2 billion), a 38 percent rise, adding a portfolio of renewables, transport and social infrastructure assets.

Paula Burgess, chief executive of PIP, will join Foresight as partner, while chief investment officer Ed Wilson and head of asset management Andy Clapp will also join the Foresight team.

“It’s a really complementary acquisition from our perspective,” Aitchison told Infrastructure Investor. “PIP is very much focused on core and core-plus infrastructure, which we have a bit of a presence in but not too much. It really gave Foresight the opportunity to expand and have a platform to expand from that. There was going to be much more rapid expansion that we could create from organic growth. It fitted really nicely with our existing business. We will always continue to have an appetite for renewables and climate-transition assets but it gives us another string to our bow.”

Aitchison added that the move was part of a “natural evolution” for PIP after it was established in 2012 following a memorandum of understanding with the UK government in 2011 as it looked to encourage UK pension funds to invest more in infrastructure.

While there were 10 initial founding members, the London Pensions Fund Authority, BT Pension Scheme and BAE Systems all withdrew from the scheme in 2014. A further split in strategy between members meant its £1 billion Multi-strategy Infrastructure Fund was downsized to £600 million in 2017. A PPP fund was also raised by five PIP members and managed by Dalmore Capital, while the manager also invested on behalf of PIP in the Thames Tideway project. Aitchison said Foresight had not decided yet if it will continue to launch funds under the PIP umbrella.

Other founding members – British Airways Pension, Lloyds TSB pension schemes, the Pension Protection Fund, Railpen, Strathclyde Pension Fund and the West Midlands Pension Fund – will continue to be engaged with the platform and have the opportunity to participate in investments, according to Foresight.

The move is Foresight’s second such major acquisition in the past year after the group bought out the management of the John Laing Environmental Assets Group in June 2019.