Consultancy Mott MacDonald has become a partner of the UK’s Pensions Management Institute (PMI) and will act as the professional body’s infrastructure finance and investment expert.
A statement said that Mott MacDonald will aim to “demystify the infrastructure financing process for PMI members, enabling pension fund investors to unlock the stable, long term returns that infrastructure projects can offer”.
The PMI supports and develops the professionals who run UK pension schemes, and its members represent some £1 trillion (€1.2 trillion; $1.5 trillion) of capital.
A Mott MacDonald statement pointed to the successful public-private partnership (PPP) investments made by large pension funds from Canada and Australia “for many years” – investments which have moved beyond their domestic markets to other countries.
In comparison, it added, “some” UK pension funds have invested in brownfield projects, “but so far have rarely considered new, greenfield infrastructure as investment alternatives, where higher yields can often be achieved”.
“Pension funds could play a significant role in developing UK infrastructure while making a significant return on their members’ investment,” urged John Seed, Mott MacDonald’s infrastructure, finance and investment director, in the statement.
The statement noted that the government had launched the Private Finance 2 (PF2) procurement model to try and reduce the risk of projects to institutional investors and that a number of UK pension funds had agreed to take a stake in the new Pension Infrastructure Platform (PIP), which was launched by the National Association of Pension Funds to try and make infrastructure investment more accessible.
However, thus far, most of the headlines around investment in UK infrastructure have been made by overseas institutions. For example, last week the Kuwait Investment Authority revealed plans to invest as much as £5 billion in UK infrastructure over the next three to five years.