UK’s £2bn pension platform seeking manager

The Pensions Infrastructure Platform, which has raised £1bn in soft commitments from UK pension funds, is launching a process to identify a possible manager.

The Pensions Infrastructure Platform (PIP), a UK initiative to invest in infrastructure on behalf of UK pension funds, is shortly launching an Expressions of Interest (EOI) process to identify a possible manager.

The process, to run from 13 May to 31 May, is looking for “existing managers, teams or individuals that may be interested in managing some, or all, of the PIP’s target £2 billion assets”.

A statement from the National Association of Pension Funds (NAPF) said that a so-called “buy option” – where PIP outsources some or all of its asset management to an existing manager or managers – is only one of three options under consideration.

The other two possibilities are a “build option”, where PIP develops its own in-house fund manager for some or all of the assets; and a “hybrid option” which would combine elements of the buy and build options, i.e., outsourcing certain sectors while keeping the management of other sectors in-house.

The EOI process – which is being advised by financial services firm PricewaterhouseCoopers and law firm Clyde & Co – is the first phase in the possible selection of a manager or managers. Following this stage, a formal Request for Proposals (RFP) stage will commence with a smaller list of shortlisted parties.

Joanne Segars, chief executive of the NAPF, said that, in addition to the manager selection exercise, “work is continuing on a number of key areas to prepare the PIP for launch later this year”.

PIP has been billed as “for pension funds, by pension funds”, with its model drawing comparisons with that of Australia’s Industry Funds Management. The platform will aim to raise £2 billion (€2.4 billion; $3.1 billion) to invest in core infrastructure assets with a return target of Retail Price Index (RPI) + 2 percent to 5 percent. It also intends to use only low levels of leverage.

So far, ten organisations have expressed an interest in investing £100 million each. They include the likes of the BT Pension Scheme, London Pension Fund Authority, the Railways Pension Scheme and the West Midlands Pension Fund.

The NAPF is calling for applications to the EOI process to be made by 10am on 13 May to eoi-responses@pipltd.org.uk.

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