Eight local authority pension funds have committed £840m (€926m) for new infrastructure investments through their investment pooling platform Brunel Pension Partnership.
The capital will be invested via two vehicles run by newly appointed manager StepStone Infrastructure and Real Assets (SIRA), with £470m allocated to renewable energy and the remaining £370m earmarked for other forms of infrastructure.
The renewables vehicle has already made commitments to Capital Dynamics Clean Energy Infrastructure Fund X, Copenhagen Infrastructure Partners IV and Brookfield Asset Management IV Renewable Sidecar.
Brunel, set up to manage £30bn of investments of 10 local government pension schemes (LGPS), said the new capital would form the Cycle 2 Brunel Infrastructure Portfolio. It had previously raised £500m for Cycle 1.
“Our clients asked us to provide them flexibility to invest to meet their individual infrastructure objectives,” said Richard Fanshawe, head of private markets at Brunel.
“In partnership with StepStone, we found an innovative way to make that happen whilst delivering the pooling objectives.”
Brunel also said its infrastructure strategy would also be aligned with their sustainability objectives.
Sofia Deambrosi, infrastructure investment principal at Brunel, said: “We believe it is crucial that investment is directed towards sustainable projects globally, to achieve the long-term objectives of our clients, support economic growth and work towards achieving the UN Sustainable Development Goals.”
She cited Gigawatt 1 – one of the world’s largest solar energy projects in the US in which Brunel has invested through Capital Dynamics – as a “great example” of “building back sustainably from the COVID crisis”.
“We want managers who are raising the bar in their industries, in terms of technology, solutions, responsibility and sustainability,” she said.
“Thanks to LGPS pooling and the appointment of SIRA, our clients benefit from resilience to sustain net return outcomes whilst diversifying their exposure to assets, sectors and asset managers.
“A significant bonus of this arrangement is that our clients now benefit from two sources of scale advantage in fee and term negotiations – LGPS aggregation and StepStone aggregation. They also benefit from the might of a global infrastructure team to co-invest.”
David Beamish, principal at Stepstone, said: “In line with Brunel’s objectives, we will continue to target responsible investing with a clear focus on sustainability and climate change as well as other considerations, especially during the challenges of COVID-19.
“In line with Cycle 1, we remain focused on working closely with the Brunel team to access the best opportunities and partners in the market to provide long term, sustainable value for Brunel’s clients.”
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