Greater Manchester Pension Fund, Manchester, England, and London Pensions Fund Authority teamed up to commit up to £500 million ($755 million) to invest in infrastructure opportunities, said executives at the pension funds.
Kieran Quinn, chairman of the £16 billion GMPF, and Susan Martin, CEO of the £4.9 billion LPFA, said in a joint telephone interview that the partnership will allow both pension funds to invest in infrastructure opportunities beyond their current commitments.
Over the next three or four years, both pension funds will look for opportunities in infrastructure, with an initial focus on Greater Manchester and London, and later extending to the U.K. as a whole. “The GMPF has a long history in infrastructure, investment,” Mr. Quinn said. “So it was natural for us to look further afield to make investments.”
The investments will be managed in-house. “What we have got here is two experienced pension funds with the expertise and the knowledge of local areas and infrastructure investments,” Ms. Martin said. “Bringing that together means we will be able to do things direct, reducing costs. It is about doing this in-house, rather than appointing a fund manager, and at the same time, regenerating the U.K.”
“For us, it is about our two in-house teams making those decisions — creating opportunities, making returns and seeking other opportunities in the future,” Mr. Quinn added.
Both executives stressed, however, that the pension funds will be free to invest in opportunities outside the joint allocation. “If after investigation and due diligence only one (pension fund) wishes to invest (in an opportunity,) they can do it, but not using the joint pot,” Ms. Martin said.
Mr. Quinn said that in anticipation of this partnership, GMPF had already increased allocations “to a couple of pots that we could use.” He did not give further details. GMPF had £98 million invested in infrastructure as of March 31, according to its latest annual report.
Ms. Martin said the LPFA’s commitment was “additional money that we have put into this pot.” She did not give further details. LPFA had a 3.5% allocation to infrastructure as of March 31, according to its latest annual report.