Local Pensions Partnership Investments (LPPI), the asset management arm for the pooled entity Local Pensions Partnership (LPP), has set up the LPPI Real Estate Fund to pool the property assets of three public sector pension funds that it manages. The vehicle has launched with more than £800 million of direct UK property investment assets and a further £460 million of property assets are due to transition to the fund over the coming months.
As capital is deployed to meet the pension funds’ agreed allocations to real estate, the fund is expected to reach around £2 billion assets under management. The move offers the schemes a more diversified exposure to a wide range of UK and international real estate, said Chris Rule, CEO of LPP.
The new fund brings improved scale and other efficiencies in an asset class that can generate stable and resilient income, Rule noted. It brings the number of distinct asset class-specific investment pooling vehicles that LPPI offers its clients to eight, with each pooled fund focusing on long-term resilience and returns.
LPPI now manages more than £17 billion of pension assets on behalf of its clients and their members. Approximately £1.7 billion of real estate assets have, until now, been managed by LPPI via separate mandates for each of LPPI’s pension fund clients – Lancashire County Pension Fund (LCPF), London Pensions Fund Authority (LPFA) and Royal County of Berkshire Pension Fund (RCBPF) – most of which will transition into the new fund.