Two Australian institutional investors will commit to invest more than £15bn (€17.3bn) in UK infrastructure and energy-transition projects at the UK government’s global investment summit today.
IFM Investors, which is owned by Australian superannuation funds, will sign a memorandum of understanding (MoU) to invest £10bn, while Aware Super is pledging to invest £5.25bn.
Ahead of today’s investment summit at Hampton Court Palace, the UK government has announced that global investors have committed £29.5bn in new projects and capital.
Prime minister Rishi Sunak and business and trade secretary Kemi Badenoch will today meet with the CEOs of global investment firms, including Blackstone’s Stephen Schwarzman, Aviva’s Amanda Blanc, Goldman Sachs’ David Soloman and JP Morgan Chase’s Jamie Dimon.
The meeting comes after chancellor Jeremy Hunt last week announced the government would boost efforts to encourage foreign direct investment in the UK, telling Parliament: “We will put in place a concierge service for large international investors”.
IFM will sign the MoU with the Department for Business & Trade to identify commercially viable opportunities, which could involve Nala Renewables, its UK-based renewable-energy firm.
Deepa Bharadwaj, head of European infrastructure at IFM Investors, said: “We currently see significant deployment opportunities, particularly as part of the UK energy transition in areas such as offshore wind, solar, battery storage, renewable fuels and pumped hydro.”
The MoU builds on IFM’s commitment in 2022 to invest £3bn in its UK-based infrastructure portfolio assets, which the company said it was on track to meet.
David Neal, IFM Investors chief executive: “Partnerships between governments and long-term investors are necessary to unlock the potential of pension funds to invest to help mitigate system-level risks such as climate change.”
Aware Super, one of the largest superannuation funds in the UK, will direct its £5.25bn investment commitment through its newly established London office, which was launched this week.
Damien Webb, deputy CIO and head of international investments at Aware Super, has relocated from Sydney to London to spearhead the organisation’s expansion in the UK beyond. He told IPE Real Assets earlier this year: “We chose London because it remains a global capital for investment staff and it provides access to the UK and Europe.”
Aware Super has ambitions to increase its A$160bn (€96.2bn) in assets under management to A$250bn, “with international expansion into the UK a key strategy aimed at achieving that goal”.
The investor will initially focus on real estate, infrastructure and private equity, with an emphasis on energy transition, affordable housing, innovation, life sciences, technology and digital infrastructure.
Webb said: “Due to our rapid growth trajectory, we believe the UK is a key platform from which we can further fuel our scale ambitions and diversify our portfolio through access to dynamic investment opportunities in new private markets. The ability to access the UK’s deep investment talent pool will also further furnish our investment team’s capabilities.
Badenoch said: “Investors like Aware Super are taking advantage of trade deals like the recent Australia Free Trade Agreement and our work breaking down trade barriers to bring new capital into the country.”
Other investments announced today by the government include £100m from German investment manager Patrizia to develop sustainable, affordable and social housing in London and the South East of England.
Patrizia has started by funding the development of 70 affordable homes in Milton Keynes in joint venture with Man Group’s UK community housing business.
Wolfgang Egger, founder of Patrizia, said: ”As a global real assets investor, Patrizia is thrilled to announce plans to invest £100m into the development of highly sustainable, affordable housing in England.”
Florence Chong contributed to this story
To read the latest IPE Real Assets magazine click here.
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