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Infrastructure project secures 10th pension fund

18 February 2013

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A new initiative to support pension funds investing in infrastructure has now secured ten funds as founding investors, and reached £1bn of investment capital.

The London Pensions Fund Authority (LPFA) and Lloyds TSB have both announced that they have joined the Pensions Infrastructure Platform (PIP), which was launched by the National Association of Pension Funds (NAPF) and the Pension Protection Fund (PPF).

Each of the founding investors has made a soft commitment of £100m to the PIP, subject to the development of the PIP being completed satisfactorily. The PIP has a target size of £2bn.

Eric Stobart, Lloyds TSB Group Pension Schemes investment and funding committee chairman, said: "We are pleased to have become a founding investor in the PIP and look forward to working with the other founders in developing the proposition.

"Infrastructure, when available in appropriate structures, should be an attractive asset class to UK pension schemes and the PIP should be an important step in making infrastructure more accessible."

Mike Taylor, LPFA chief executive, said: "We are delighted to be at the start of what we expect to become a real boon for UK pensions management and for the economy and society at large."

According to the NAPF, the PIP remains on track to launch in the first half of the year. PwC will help the PIP select a manager to run the fund.

The two latest funds join British Airways Pension Scheme, BAE Systems Pension Funds, BT Pension Scheme, Pension Protection Fund, The Railways Pension Scheme, Strathclyde Pension Fund, and West Midlands Pension Fund, which joined last year.

NAPF chief executive Joanne Segars said: "We have made excellent progress to secure £1bn in just over a year, and we are pleased to welcome two more funds on board.

"Infrastructure projects can be a very good match for pension fund liabilities, but so far UK pension funds have struggled to explore this asset class. This new platform will make it much easier for them to do so."

First published 18.02.2013