UK workplace pension scheme NEST has provided €530m in seed capital to a new European infrastructure debt fund managed by IFM Investors, as part of its plan to invest £5bn (€5.9bn) in private markets through the manager over the next five years.
NEST, which became a 10% shareholder in IFM’s holding company, Industry Super Holdings, earlier this year, said the launch of the infrastructure debt fund will further “amplify investments into private markets, including assets in the UK such as UK fibre, wind, waste-to-energy, bus, or rail infrastructure”.
The £50bn pension fund said this is the first fund in the partnership with IFM, a step that will help the pension fund achieve its plan of investing £5bn in private markets through IFM by 2030.
Torsten Bell, UK minister for pensions, said: “I welcome the steps NEST, and the wider pensions industry, are taking to invest in more productive assets, from growing companies to infrastructure. This demonstrates the real appetite behind pension funds signing up to the Mansion House Accord and the positive outlook on the UK private markets.
“Working together, government and industry will deliver the investment to drive future prosperity, supporting better outcomes for savers and faster growth for Britain.”
Liz Fernando, CIO at NEST said: “Our members’ interests are at the heart of NEST’s investment strategy. Seeding this global infrastructure debt fund provides our members with access to diversified, world-class investment opportunities, and investments back in their communities and the infrastructure they use.
“We know the importance of investing in the UK, and that’s why we have signed up to initiatives like the Mansion House Accord.”
Fernando said the new IFM fund further shows NEST’s commitment to supporting the UK economy and gives a significant boost to the pension fund’s ambition to almost double its assets under management into private markets to 30% by 2030.
David Cooper, the head of debt investments in EMEA of IFM Investors, said: “IFM exists to invest, protect, and grow the long-term retirement savings of working people, and we’re proud to support NEST in unlocking the income and risk-adjusted return potential of infrastructure debt for its 13m members.
“Investing in infrastructure is critical to powering the digital economy, cutting carbon emissions, and driving the energy transition. Private debt capital is a key enabler—offering strong relative value for investors and, most importantly, their members.”
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