The Pensions Infrastructure Platform (PIP) has launched a multi-strategy infrastructure fund with a target size of £1 billion.
The fund aims to offer institutional investors a high degree of alignment and transparancy, and larger investors will be able to co-invest in order to achieve greater benefits of scale. At the same time, the PIP has set the minimum commitment size at a level to allow schemes of any size to invest on the same terms as all the other investors. The multi-strategy fund will focus on core UK infrastructure sectors, including transport, renewable energy, communications, housing and social infrastructure. It will adopt a long-term buy and hold approach to produce low risk, inflation-linked cash flows for investors.
PIP chairman, Mike Weston, commented: “This fund is further proof that investors believe that PiP works and is delivering on its promise. With the support of our founding investors we’ve already mobilised £1 billion for investment into UK infrastructure, and with this fund we are achieving our key objective of providing pension schemes of all sizes with an efficient route to direct ownership of infrastructure assets.”
Strathclyde Pension Fund and West Midlands Pension Fund are among the PIP’s founding investors, and Philip Braat, chair of Strathclyde, said: “Infrastructure projects are attractive for Strathclyde as long-term, low-risk investments – and our members are also positive about seeing their savings supporting jobs and communities. However, until PIP was established, the market was really geared towards short-term investors. We have more control now, so we have access to opportunities that are tailored to the specific needs of a pension fund.”
For the West Midlands, strategic director of pensions, Geik Drever, commented: “There’s a huge opportunity in UK infrastructure at the moment. We helped establish PIP because we believe there’s room in the market for a transparent platform where pension funds can invest together at scale to make the most of this opportunity. The PIP Multi-Strategy Infrastructure Fund opens the door to this opportunity for pension funds of all sizes.”