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PiP launches infrastructure fund

11 March 2016

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The Pensions Infrastructure Platform (PiP) launched the PiP "multi-strategy infrastructure fund" this week with a target size of £1billion.

The Fund will invest directly in UK infrastructure and aims to provide institutional investors with "alignment and transparency" that it says is not available elsewhere in the market.

The Fund will also offer a co-investment programme for larger investors.

It has a minimum commitment size that means schemes of any size can invest and still share the same terms with all other investors, including smaller pension schemes.

This aligns the Fund with one of PiP's core principles of being open to all pension schemes, regardless of size or ultimate sponsor.

Mike Weston, PiP chief executive, said: "We are a true long-term investor and this is reflected in the way we build our relationships with both our investors and developers – allowing us to secure the long-term, low-risk, inflation-linked cash flows that pension schemes need."

"Because we're backed by pension schemes and understand their needs, we have been set up and structured to meet these needs in the best possible way," he added.

The Fund will focus on core UK infrastructure, targeting transportation; (renewable) energy; utilities; communications; housing; and social infrastructure, and have a long-term buy-and-hold investment strategy to generate low risk, inflation-linked cash flows.

Potential investors can choose their preferred options through the co-investment programme and the Fund's sub-portfolios, which have different risk/return characteristics.

Alan Rubenstein, chief executive of the Pension Protection Fund, one of the founding investors said PiP is providing an opportunity to invest in a way that is "specifically designed for pension funds."

A second founding investor, Geik Drever, strategic director of pensions at West Midlands Pension Fund, Founding Investor, added that there's a huge opportunity in UK infrastructure currently.

He said: "We helped establish PiP because we believe there's room in the market for a transparent platform where pension funds can invest together at scale to make the most of this opportunity."

First published 11.03.2016