UK asset manager to launch £300m infra fund

Gresham House has secured capital from the Berkshire Pension Fund as an investor in both the company and the new vehicle.

UK-listed asset manager Gresham House is preparing to launch a £300 million ($374.7 million; €354.8 million) fund focused on infrastructure.

The firm, which traditionally invests in smaller UK-based public companies, is launching the fund in a bid to meet greater demand for alternative investments. Gresham House chief executive Tony Dalwood told Infrastructure Investor that the fund is likely to target a mix of direct and indirect investments, with opportunities arising in the renewables and social housing sectors.

Gresham House said its initiative needed the support of “patient capital” and as a result has secured an £8.2 million investment from the Berkshire Pension Fund for a 20 percent stake in the investment firm. The pension fund will also act as a cornerstone investor in the proposed British Strategic Investment Fund, with Gresham House hoping to attract further local government pension schemes to the vehicle.

“This platform will enable us to reduce costs and obtain diversity in our investments,” said John Lenton, chairman of the pension fund. “We will be targeting niche areas and make investments which are smaller and usually longer-term than those that interest the major investment houses.”

Lenton added to Infrastructure Investor that the fund will be targeting returns of between 4 and 4.5 percent, although no timescale is set as of yet. Berkshire Pension Fund has a current infrastructure allocation of about 5 percent, although he said there is room to increase this to about 10 percent. It is currently in talks with the London Pensions Fund Authority and the Lancashire County Pension fund over joining the duo's Local Pensions Partnership pool.

Gresham House was established in 1857 and began trading on London’s main stock market in 1950, before moving to the Alternative Investment Market in 2014.