Cornwall Pension Fund has made an initial £115m (€135m) commitment to a newly created local impact fund focused on housing and energy-generation assets in the UK.
The UK local government pension scheme (LGPS) said £65m of the capital, which represents over 55% of the new local impact portfolio, will invest alongside PGIM Real Estate’s LGPS-backed UK Affordable Housing Fund with the remaining capital invested equally in two renewable energy strategies via Schroders Greencoat.
The renewables mandate involves investing in the Greencoat Renewable Income fund and Greencoat Cornwall Gardens, a new fund Cornwall Pension has created with the manager to target new renewable assets in Cornwall.
The £2.4bn pension fund said the capital allocated to the Greencoat Cornwall Gardens fund has been invested in listed renewable investment trusts and will be redeemed when required by the fund.
The Cornwall Local Impact portfolio was designed and will be monitored by LGPS investment-pooling platform Brunel Pension Partnership.
Councillor Jayne Kirkham, chair of Cornwall Pension Fund pensions committee, said: “We have worked closely with Brunel to ensure that pooling delivers not just scale advantages – but local impact, too.
”The new Cornwall Local Impact portfolio, as part of our social impact allocation, enables us to combine our fiduciary responsibilities to our members with delivering positive social and environmental outcomes in our county, where our members have worked and lived. More than that, we hope it provides a framework for others to follow.”
Laura Chappell, the CEO of Brunel Pension Partnership, said: “Cornwall Pension Fund set an ambitious brief to marry their fiduciary responsibilities to local impact investing.
”We believe this kind of product should become a feature of pension pool investing. We look forward to seeing the fund deliver for its members and for Cornwall in the years ahead.”
Matt Ridley, a partner at Schroders Greencoat, said the investment will provide Cornwall Pension Fund with the ability to directly invest in local renewable generation assets in Cornwall. ”At the same time, this investment will aim to deliver stable returns which will benefit Cornwall’s pension fund members for decades – and also support the decarbonisation of the county.”
Charles Crowe, senior portfolio manager at PGIM Real Estate, said: “This investment showcases the core aim of our affordable housing strategy: to deliver high-quality private rental homes, at affordable prices, for working people and families whilst also delivering an attractive and sustainable income-based return to our investors.”
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