LPFA pulls out of Pensions Infrastructure Platform

The London Pensions Fund Authority (LPFA) has withdrawn from the Pensions Infrastructure Platform (PIP), citing concerns over risk and pricing.
In February last year, LPFA became the tenth signatory to join up to the PIP, a vehicle run by the National Association of Pension Funds (NAPF) aimed at encouraging institutional investment into UK infrastructure projects.
This week, it has emerged that private sector pension funds run by BT and BAE Systems have also withdrawn from the scheme, which has received energetic backing from central government.
A spokesman for LPFA said: “As the PIP moved towards awarding its first mandate, it became clear that the pricing and risk-return profile targeted by the PIP, as well as other aspects of the PIP cost structure, differ from those now required by the LPFA.”
It is not known how much the LPFA has already contributed to the platform, but it initially committed to investing £100 million on joining PIP in February 2013.
However, the LPFA added that it remains committed to infrastructure investment more broadly, and continues to actively pursue investment in infrastructure and real estate as part of its ongoing investment strategy.
Two LGPS funds, Strathclyde Pension Fund and West Midlands Pension Fund, remain part of the PIP, which announced its first fund this week.
The PPP Equity PIP Limited Partnership has been established by Dalmore Capital Ltd, which will act as manager of the fund.
The PIP was launched in October 2012, aimed at raising up to £2 billion of institutional and pension fund investment in infrastructure.
The Dalmore fund has a hard cap of £500m, of which £260m has been committed.
A statement from NAPF said: “Further fund-raising from other pension schemes will now commence.  Additional funds will form part of the PIP in due course.”
Last year, Joanne Segars, chief executive of NAPF said that the fund would be based on a low risk, low cost model.