UK – The pension schemes for British Airways have been confirmed as a further founding investor of the Pension Protection Fund's proposed £2bn (€2.5bn) Pension Infrastructure Platform (PIP).
At a presentation on the PIP given by Alan Rubenstein, chief executive of the UK lifeboat scheme, BA Pensions was listed as a founding investor alongside previously announced funds including Strathclyde Pension Fund and the schemes for BAE Systems and BT.
It is understood that members of the National Association of Pension Funds (NAPF) were informed of BA's involvement during last month's annual conference, but that it was not announced alongside six other funds as joining the platform, as final approval was still pending at the time.
BA currently has two defined benefit pension funds – the legacy Airways Pension Scheme and the New Airways Pension Scheme.
Requests for clarification for which scheme would be committing the expected £100m in seed capital were not returned at the time of writing.
Speaking at this morning's event hosted by First State Investments, Rubenstein noted that the PIP was one way of allowing for infrastructure investment by UK funds without incurring the cost of setting up in-house teams.
He noted that the UK pensions industry was behind its counterparts in Canada and Australia in terms of infrastructure exposure and that many European funds had similarly small stakes at present – pointing to the €274bn Dutch pension fund ABP.
"There is no doubt that, if you take the top four or five UK pension funds, together, we are not as big as ABP, but, by pooling our resources, we can match them and quite happily bid against them," he said.
Rubenstein further discussed potential investment opportunities for the PIP, noting that while the Treasury's previously unveiled £250bn National Infrastructure Plan offered investment opportunities, it was not a "slam dunk".
He also refuted any claims that the platform – the result of a memorandum of understanding between the PPF, NAPF and Treasury – was receiving "special treatment" from the government.
"The moment that that happened, there would be a conflict in the EU about state aid, and rightly so, too," he said. "We are not asking for special treatment."
He added that he preferred to see the government introduce measures that benefitted the entire market, such as the UK Guarantees scheme underwriting certain investment risks in critical infrastructure.
"The statement that [the government] made yesterday about increasing the limits on local authority investments in [limited partnerships] is another step towards making it easer for local authorities to come in," he said.