UK local government pension schemes (LGPS) have committed £220m (€252m) to a new open-ended inflation-linked UK infrastructure debt fund launched by abrdn.
Investment firm Abrdn said the Inflation-Linked Infrastructure Debt Fund (ILID) which focuses on “high-quality investment grade infrastructure debt whilst also capturing additional illiquidity premium”, was designed with LGPS Central, one of the UK’s eight local authority pension asset pools.
The fund will invest in a broad range of inflation-linked private infrastructure debt in the UK with a limited allocation to European assets as it targets sectors like clean energy generation, storage and distribution, transport and social infrastructure.
Alex Campbell, investment director at Abrdn, said: “Institutional investors face challenges not seen in over a generation. Liability-matching assets that preserve a real rate of return, provide some shelter from public market volatility and have robust credit quality in times of economic downturns are in short supply.
“We are excited to launch the Abrdn Inflation-Linked Infrastructure Debt Fund which seeks to address these challenges by combining inflation protection with access to high-quality assets that can improve the UK’s national infrastructure.”
Campbell said LGPS Central’s involvement in setting up ILID ”ensures the fund really delivers a way to meet local pension schemes’ investment goals”.
Mike Gillespie, investment director, private markets for LGPS Central, said: “This is a strategic cornerstone investment, a first for our Stable Return private debt sleeve.
”It was really important to make sure that the design was not only a good strategic fit for us but also marketable to other potential investors.”
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