A majority of U.K. pension funds (62%) expect to increase investment in British infrastructure over the next 12 months and prioritize it over overseas markets, according to a survey conducted for alternative investment fund GLIL Infrastructure.
GLIL is a partnership of U.K. pension funds managed by Local Pensions Partnership Investments.
The survey of executives at 300 pension funds, including private and local government funds, was conducted by Censuswide for GLIL Infrastructure in February. It found that for 36% of respondents, the leading reason for the increased investment, after fiduciary duty, was to support the nation's net-zero plans, followed by 33% who cited the desire to deliver stable, inflation-linked returns and powering the U.K. economy.
More than half, 56%, of the respondents said their current infrastructure investments are based in the U.K. and 67% said they plan to prioritize U.K.-based infrastructure projects over opportunities in overseas markets.
Obstacles cited by the pension fund executives included keeping sustainability at the core of investment pipelines, a lack of suitable investment opportunities, planning concerns, and political and economic instability.
Pension fund capital to deploy for U.K. infrastructure "can make a huge difference," said Ted Frith, CEO of GLIL Infrastructure, in a release on the survey. Those investments give access to reliable, inflation-linked returns while supporting the transition to a more sustainable economy, but "more needs to be done to increase the supply of infrastructure investment opportunities with the appropriate risk versus reward profile for pension schemes," Mr. Frith said.