The National Association of Pension Funds (NAPF) has confirmed the Pensions Infrastructure Platform’s (PIP) first fund will be the PPP Equity PIP Limited Partnership, managed by Dalmore Capital.
The NAPF, which owns PIP Ltd, said five of the UK’s largest pension funds are among the founding investors for the first close of this phase of the fund, including British Airways Pensions, Pension Protection Fund, Railways Pension Scheme, Strathclyde Pension Fund and West Midlands Pension Fund.
It was first announced in December that Dalmore had been appointed, but the NAPF added today the fund has a hard cap of £500m, of which £260m has been committed. It said further fundraising from other pension schemes will now commence and additional funds will form part of the PIP in due course.
NAPF chief executive Joanne Segars said: “This is a major milestone for the PIP and fantastic news for all UK pension schemes that have an interest in infrastructure investment. Investments will be targeted at meeting the PIP’s original aim to make infrastructure work for pension funds, offering investors a low-risk, long-term investments providing inflation-linked cash flows.”
Chief secretary to the Treasury Danny Alexander said: “Infrastructure is the backbone of a strong economy and we must invest to build the modern UK economy of the future. It’s great news that the NAPF and its founding investors are starting to use this unique model. This is just the start and I urge other pension funds to step up and take advantage of the opportunity to match their interests with long-term infrastructure investments.”
Pension Protection Fund chief executive Alan Rubenstein said: “Historically, it’s been difficult for pension funds to invest in infrastructure in a concerted, cost-effective or long-term manner – the PIP marks a change in that. Today’s announcement is testament to the hard work that has gone into making this platform a reality and the PPF is very proud to be part of it.”
The creation of the PIP in October 2012 marked the first time pension funds had combined to create a new financial entity in the UK. The not-for-profit infrastructure fund has a target size of £2bn and will feature low fees of around 50bps, low risk projects free of construction risk and long-term cash returns of RPI+2-5%.
Comments