Pension bodies team up to create London housing and infrastructure investment super-fund

Three London local government pension bodies have announced plans for a new fund worth hundreds of millions of pounds, focused on housing and infrastructure investment.

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LGPS pool the London Collective Investment Vehicle (LCIV) is joining forces with Local Pensions Partnership (LPP) and the London Pensions Fund Authority (LPFA) to launch the new venture later this year.

Those behind the scheme say it will focus on assets in the capital including build-to-rent residential property, affordable housing, community regeneration and digital and clean energy infrastructure.

A statement from the partners said: “Each of these assets will be selected to provide sustainable, long-term and risk-adjusted value to the pension scheme members, while creating a ‘double bottom line’ by making a positive contribution to social and environmental issues in the area.”

It said that the London Fund is being created to address the challenge of expected population growth in the capital – anticipated to be faster than any other UK city.

A spokesperson for the fund said: “Through the collaborative efforts of these London based institutions, The London Fund is expected to benefit from increased scale.

“This allows us broader access to resources and a much wider investment pipeline than would be available to any of the individual organisations acting alone.

“We are delighted to be able to develop a project that will provide attractive returns for our members while helping us support communities in London.”

The fund, which will have a closed-ended structure, will be managed in partnership between LCIV and LPP subsidiary LPP Investments Ltd.

Last year, speaking to Room 151, Mike O’Donnell, chief executive of LCIV, said: “The whole issue of investment in local assets – infrastructure and housing in particular – is an issue that played out through earlier discussions in the formations of the pools.

“Clearly there has to be a sound investment case but if you can use pension fund assets to deliver both a good financial return and to help with the housing crisis, then I think that’s a good thing and I know that many of our clients are interested in looking at that option.”

LPP was formed in 2016 through a collaboration between Lancashire County Council and the London Pensions Fund Authority.

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