PIP gets green light to become direct manager

The UK pension platform made hires last year in preparation for the milestone as it seeks to launch a multi-strategy infrastructure fund.

The UK’s Pensions Infrastructure Platform (PIP) has received authorisation by the Financial Conduct Authority (FCA), the country’s financial regulator, to become a full-scope Alternative Investment Fund Manager (AIFM).

Launched in 2013, PIP is a group of UK pensions that aims to raise £2 billion (€2.6 billion; $2.9 billion) to invest in infrastructure. The milestone opens the way for the platform to become an asset manager in its own right, a role it intends to capitalise on by launching a multi-strategy infrastructure fund.

PIP last August made a number of senior hires to that effect, with Ed Wilson and Paula Burgess respectively joining as its first investment director and chief operating officer. That came 10 months after it appointed Mike Weston as chief executive. It initially hoped to achieve FCA authorisation by the third quarter of 2015.

The platform in July passed the £1 billion fundraising mark, bringing it more than halfway towards its target. The money was so far managed through third-party funds – comprising more than £500 million pledged to the Dalmore PPP Equity PIP Fund and £130 million committed to Aviva Investors’ PIP Solar Photovoltaics Fund – as well as a £370 million co-investment alongside Dalmore Capital in the £4.2 billion Thames Tideway Tunnel.

“PIP initially established itself in the market by partnering with other fund managers, but FCA authorisation provides the foundation for the next stage in our growth – the launch of our first multi-strategy infrastructure investment fund managed internally by PIP, which will aim to provide the long-term, low risk, inflation-linked cash flows that UK pension schemes continue to seek,” Weston said in a statement.

PIP charges fees of about 50 basis points to its members, in return for which it aims to offer them low-risk, long-term cash flows of inflation plus 2.5 percent.