UK’s Nest begins hunt for maiden infra equity manager

UK pension provider National Employment Savings Trust has started the search for its first infrastructure equity manager, building on its debut infrastructure debt investment last year.

The workplace pension group has issued a 17 February deadline for managers to submit pitches, which it stated must include “high quality and evergreen investment processes, a robust risk management framework and consideration of environmental, social and governance factors”.

A spokesman for Nest told Infrastructure Investor the search could conclude in either one or multiple managers being sourced for the first investment. Nest has identified global, UK-focused and renewables-based strategies as three infrastructure streams it wants to invest in, the spokesman added.

He declined to state how much Nest is looking to provide to its prospective managers, but said the pension provider remains flexible on desired returns as it awaits submissions.

“It’s clear that when chosen and managed carefully, unlisted infrastructure equity typically offers stable, long-term returns even in difficult market conditions,” Stephen O’Neill, Nest’s head of private markets, said in a statement.

However, he offered a note of caution regarding fees: “Before applying, fund managers need to carefully consider their fees and investment structures. We need approaches that are repeatable, affordable and scalable to match Nest’s rapidly growing AUM.”

Nest has assets under management of about £9 billion ($11.8 billion; €10.6 billion). With 8.5 million people enrolled it is the largest pension scheme in the UK by membership.

Nest made its entry into private market investments in September last year, when it announced it was committing between £400 million and £500 million to private debt strategies in infrastructure and real estate with BlackRock and Amundi, respectively. The selections were a result of a tender process which drew responses from nearly 40 organisations.