UK – Founding investors of the Pensions Infrastructure Platform (PIP) are displaying a growing understanding of construction risk, according to the chief executive of the Pension Protection Fund (PPF), signalling a potential willingness on part of the fund to invest in greenfield projects.

Alan Rubenstein said there was “more willingness now than there was at the start” to consider infrastructure projects with construction risk, despite founding investors initially completely opposing any such investments.

Discussing the PIP’s future on the fringes of the National Association of Pension Funds (NAPF) annual conference in Manchester after briefing members on the progress, the organisation’s chief executive Joanne Segars also said the fund – the result of a memorandum of understanding between the PPF, NAPF and UK Treasury – was on track to invest by the end of the year.

Segars said a “very extensive” manager selection, launched in February, was drawing to a close, but that she was “not in a position today to announce the manager or managers”.

Asked about the PIP’s view of construction risk, Segars indicated that the view of the 10 founding investors was evolving.

“It would be fair to say the views on construction risk have modified over the last year or so, as people’s understanding of construction risk has grown – but also as it has become more apparent that there are ways of managing construction risk from an investment perspective,” she said.

Rubenstein agreed with Segars that investors had changed their attitude towards construction risk.

“There has been a growing understanding among the founders of just what’s involved in construction risk, and there is perhaps more willingness now than there was at the start, where people were just directly opposed to it,” he said.

“Again, as Joanne said, we’ve always been very clear construction risk wasn’t an issue in the sense that there are ways to lay that off.”

Segars also made light of suggestions the National Employment Savings Trust would invest in the PIP after its CIO repeatedly expressed an interest.

“Every time I open one of your magazines, Mark Fawcett is saying NEST is going to invest, which is very nice,” she said.

She noted that the PIP did not exclude defined contribution (DC) funds from investing, despite the nine named founding investors being defined benefit (DB) schemes.

“This isn’t something that’s for DB schemes – this is something that is for pension schemes that want to invest,” she said.

Asked what the PIP could do to address any regulatory hurdles that may preclude DC funds from investing in infrastructure, Segars added: “A lot of that is about pricing issues, which is an issue for the schemes to deal with.”

Rubenstein echoed the sentiment that the PIP would be open to DB and DC scheme alike.

“We’ve always said this is open, frankly, to anybody who isn’t going to damage our tax position,” he said.