Nordea Life & Pensions, Barnet Council Pension Fund and Stichting Pensioenfonds voor Fysiotherapeuten (SPF) are among 29 European and Middle Eastern investors to have committed US$2.15bn (€1.82bn) to IFM Investors’ infrastructure funds.
The Nordic insurer, the UK local authority pension scheme and the Dutch pension fund have invested US$90m, US$62.5m and US$27m, respectively, in IFM’s global infrastructure equity fund.
Australia-headquartered IFM Investors said it raised US$2.15bn from European and Middle Eastern investors between 1 July 2016 and 30 September 2017 for its infrastructure equity and debt strategies.
Globally, it raised US$6.5bn over the 15-month period.
Of the 29 European and Middle Eastern investors, 20 were new clients from seven countries, including Denmark, Finland, the Netherlands, Switzerland and the UK.
More than 80% of the capital came from pension schemes – US$855m came from private pensions and US$920m from public pensions – with the balance made up by insurers (US$370m) and a foundation (US$10m).
Most of the capital (US$1.7bn) was invested in IFM Investors’ global infrastructure fund, with US$430m allocation to its debt fund.
Annabel Wiscarson, executive director at IFM Investors, said: “We have seen a strong level of activity, as investors turn their interest in infrastructure investing into reality.
“From UK local authority and private company pension schemes, to those based in continental Europe, institutional investors recognise the increasing appeal of infrastructure equity and debt as potential sources of uncorrelated returns to other asset classes that can effectively match long-term liabilities.”
Wiscarson said there had been a notable increase in interest from insurers. “Regulation such as Solvency II is also having an effect, making infrastructure a more attractive investment proposition,” she said.
Most infrastructure funds are closed-ended with finite lives – including the two largest funds today, managed by Global Infrastructure Partners and Brookfield Asset Management, according to Preqin. And while one of its Australian rivals, AMP Capital, converted its open-ended European infrastructure fund in 2014 and relaunched it as a global closed-ended fund, IFM Investors has perservered with an open-ended structure for its flagship global fund.
Wiscarson said: “Our investors find our open-end infrastructure equity structure particularly appealing. Not only can they see the assets they are investing in, but they also recognise how an open-end structure means we don’t have to divest from assets at pre-determined points in time, and rather, can own and manage assets responsibly for decades.
“Our commitment to ESG principles has also appealed, as many investors agree that well-governed, sustainably run companies make for better long-term investments.”
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