The UK-based Local Pensions Partnership has launched a global infrastructure fund targeting total commitments of £1.5 billion ($1.9 billion; €1.7 billion).
The partnership, comprising the Lancashire County Pension Fund and the London Pensions Fund Authority, has ploughed £688 million into the vehicle itself and wants to collect the remaining £812 million within the next couple of months ahead of a September close.
The duo said the new vehicle will look to deploy capital predominantly in the UK, Europe and North America. It will seek direct stakes in infrastructure assets, eye co-investments and commitments to primary infrastructure funds and pool the founders’ current infrastructure assets into the global fund. They have not stated intended return figures for the scheme.
The fund is exclusive to local government pension schemes in the UK similar to the LCPF and LPFA as well as other tax-exempt corporate or public pensions. The Royal County of Berkshire Pension Fund last year agreed to join the LPP pool but is yet to formalise its membership.
“Infrastructure is a core investment focus for LPP,” said Susan Martin, chief executive of the LPP. “This new fund capitalises on our extensive knowledge and experience in what is a highly illiquid asset class. In pooling the infrastructure allocations of our shareholder pension schemes, the fund will also be an attractive vehicle for other investors looking to build their exposure to cost-efficient, diversified infrastructure assets.”
The pension schemes are two of the largest investors in infrastructure among their local government peers. Latest available figures show the LCPF’s allocation to infrastructure standing at 9.5 percent, valued at £569.5 million, while the LPFA’s allocation of 7.1 percent is valued at £321.25 million.