National Employment Savings Trust, London, appointed Octopus Renewables to manage an initial £250 million ($346 million) allocation to unlisted infrastructure equity, a spokesman confirmed.
Octopus Renewables will manage direct investments in renewable infrastructure projects, such as solar and offshore wind farms in the U.K. and in Europe, on NEST's behalf.
NEST's investments with Octopus are expected to increase to £1.4 billion over the next decade. The new investments will be funded from new contributions.
The £16 billion defined contribution multiemployer plan currently has around 5% of its investments allocated to private credit, which includes an exposure to infrastructure projects. An additional 4% is invested in retail real estate. Over the next decade, NEST will increase its private markets exposure to 15%.
Two other managers will be announced in due course to jointly manage a total 5% unlisted infrastructure equity allocation, the spokesman said. Investments will be made over the next decade.
"We want to invest in the energy of the future, not the past. The money we manage on behalf of our members needs to provide steady returns for the next 10, 20, 30 years. Renewable energy projects are fantastic opportunities. Every new site provides greater energy security, increases potential returns and contributes to tackling the climate emergency. We want to deliver bigger pensions for our members, in a better world," Mark Fawcett, CIO of NEST, said in a news release.
