The Pensions Management Institute (PMI) has entered into a partnership with an engineering, management and development consultancy.

Mott MacDonald has now become PMI's infrastructure finance and investment expert and the partnership aims to demystify the infrastructure financing process for PMI members, enabling pension fund investors to unlock the stable, long-term returns that infrastructure projects can offer.

While large pension funds in Canada and Australia have been investing in public-private partnership infrastructure for many years and are now looking for investments outside of their borders, UK pension funds rarely consider investing in new, greenfield infrastructure as investment alternatives, where higher yields can often be achieved, Mott MacDonald said.

John Seed, Mott MacDonald infrastructure, finance and investment director, said: "Billions of pounds worth of investment in infrastructure is needed for the UK to remain competitive and private investment will be necessary to fill the government shortfall."

He said that the government has launched Private Finance 2 (PF2) to encourage new sources of investment, which is designed to reduce the risk to institutional investors to make construction projects more attractive.

Seed also said ten UK pension funds have agreed to take a stake in the newly formed Pension Infrastructure Platform (PIP), which is managed by the National Association of Pension Funds (NAPF), to help make infrastructure investment a more accessible option for such investors.

"As a result, pension funds could play a significant role in developing UK infrastructure while making a significant return on their members' investment involvement," Seed said.

PMI chief executive Vince Linnane said: "Through these professional partnerships the PMI seeks the highest standard and quality of independent services and information for its members."

First published 04.07.2013

monique_simpson@wilmington.co.uk