The nascent UK version of IFM Investors forsees a time when both will share ideas and co-invest, says Joanne Segars, chief executive of the National Association of Pension Funds, who is visiting Australia this week.
After three years of planning, the Pension Infrastructure Partnership (PIP) invested its first funds in schools and hospital buildings earlier this year through a designated fund manager, but hopes to emulate IFM by building up its own in-house investment team.
Segars, who was one of the instigators for PIP, also admitted IFM was a “poster child” for PIP’s development.
“We think that there is a great alignment of interest,” she said. “We can learn from them and we hope they can learn from us too.”
PIP’s current focus is to match long term defined benefit liabilities to low-risk, inflation linked revenue as a long term investment.
The buildings purchased so far have been sold on from private public partnerships by specialist manager Dalmore Capital, who were appointed by PIP for their ability to source word-of-mouth deals, rather than auctions that would have attracted worldwide competition.
Segars said she was not overly concerned at the rise in investor demand for infrastructure assets creating a price bubble. She cites the UK’s government need to source £375 billion (AUS$684 billion) from 40 major projects as an example of the enormous untapped potential asset supply from OECD governments.
PIP has an initial £500 million (AUS$900m) commitment from five large UK defined benefit funds*, half of which has now been invested and Segars is in talks with other funds interested in joining the partnership.
With time PIP will add more funds and sub-asset classes such as solar energy and infrastructure debt. In time, the organisation will also point its own chief executive.
- The founding investors for the first phase of the PIP PPP Equity Fund, include: British Airways Pensions, Pension Protection Fund, Railways Pension Scheme, Strathclyde Pension Fund and West Midlands Pension Fund.