Pensions infrastructure pot ‘perfectly pitched’
0Five local government pension schemes have agreed to put a total of £250m into a pot to invest in local regeneration and infrastructure.
West Midlands, Greater Manchester, Merseyside, and South and West Yorkshire Pension Funds have launched the Investing for Growth pot, which will seek to boost returns and deliver positive economic impact. Each fund will initially put in £50m.
The idea germinated from work funded by the Local Authority Pension Fund Forum and carried out by the Smith Institute and the Centre for Local Economic Strategies (CLES). Their report, released last September, suggested a minimum of five funds get together to establish a fund for local growth.
“Obviously now you have the bigger funds, Northern, looking to use pension fund money for the places they represent,” said Neil McInroy, chief executive of CLES. One of the key points that was considered when the work was being done was the funds’ fiduciary responsibility, he added.
“A £250m amount is enough to be attractive and enough to stimulate interest but it is also prudent as well: it’s a nice balance,” said McInroy. “If it was £10m it’d be ‘what’s the point of that?’. If you said £2bn it’d be ‘whoah’. So this is perfectly pitched in terms of what you’re looking at here.”
The funds are now seeking expressions of interest from asset managers, which could include councils. Chairman of the Greater Manchester Pension fund, Councillor Kieran Quinn, said: “This initiative is not only to establish the depth and breadth of the current market, but to challenge asset managers to bring opportunities forward on sufficient scale to match the investment allocations pension funds are prepared to commit.”
