UK local pensions push Gresham fund to £150m first close

The vehicle, which has a £300m target, aims to generate 8-10% returns from local infrastructure and social housing projects.

Gresham House has reached a £150 million ($192 million; €172 million) first close on its British Strategic Investment Fund, which primarily targets local government pension funds, endowments and family offices.

BSIF has a £300 million target, a spokeswoman for Gresham House told Infrastructure Investor. It is aiming for an annual return of 8-10 percent, including a 3-5 percent yield.

The vehicle is the first of the UK firm’s Long Term Investment Solutions Platform, which it launched in February in a bid to “deploy long-term or patient capital” alongside its other strategies, which also include public equity and forestry.

Two local government pension funds, including the Royal County of Berkshire Pension Fund, acted as cornerstone investors in BSIF. The firm declined to disclose the identity of the second anchor LP.

The vehicle will aim to invest in local infrastructure and social housing projects that could be left disregarded by the pooling of UK local authorities, which is set to create much bigger pots of money, said a spokeswoman for Gresham.

The firm did not elaborate on which sectors would fall under the local infrastructure umbrella but the spokeswoman said it could include local transport projects and charging stations for electric cars.

“The Fund will be structured to offer its limited partners the potential to increase their exposure to preferred local or regional investments through co-investment opportunities; they will also have the ability to influence the introduction of projects to Gresham House’s experienced investment team,” the firm noted.

Among the senior staff sitting on Gresham House’s investment committee are Peter Moon, former chief investment officer of the Universities Superannuation Scheme, and Gary Steinberg, former CIO of the International Monetary Fund and the Wellcome Trust.

The vehicle is set to hold a final close in the second half of 2018, with partial closes possible in the interim, the spokeswoman said.