Two UK local government pension schemes (LGPS) in the Midlands have partnered with Macquarie Asset Management in a co-investment across a portfolio of UK regional airports.
LGPS Central, acting on behalf of two of its partner funds, West Midlands Pension Fund and Cheshire Pension Fund, is co-investing in the portfolio that includes Birmingham Airport, Bristol Airport and London City Airport.
Last month, Macquarie agreed to become a 75% owner of London City Airport by acquiring Ontario Municipal Employees Retirement System’s (OMERS) and Alberta Investment Management Corporation’s (AIMCo) 50% stake in the UK airport.
The deal was agreed just months after Macquarie bought a 25% stake from another Canadian investor, Ontario Teachers’ Pension Plan.
Prior to Macquarie’s initial acquisition in June, London City Airport had been jointly owned since 2016 by a consortium of AIMCo, OMERS, Ontario Teachers and Kuwait’s Wren House Infrastructure Management, in a deal that was reportedly valued at up to £2bn (€2.6bn).
Macquarie, which acquired the stakes on behalf of its latest European infrastructure fund, for which it raised €8bn, also in June bought a 55% stake in Bristol Airport and a 26.5% interest in Birmingham Airport from Ontario Teachers.
LGPS Central said the co-investment reinforces the “importance of long-term, responsible capital in supporting UK infrastructure, regional connectivity and economic growth”.
Paul Nevin, director of investment at the West Midlands Pension Fund, said: “The investment reflects our commitment to long-term, responsible investment that delivers for our members and the wider economy.
“Working through LGPS Central, we’re proud to have played a leading role in creating the co-investment vehicle, supporting this and future infrastructure investments. Strengthening regional infrastructure, including Birmingham Airport, supports jobs, connectivity and sustainable growth across the Midlands and beyond.”
Richard Law-Deeks, CEO Officer of LGPS Central, said: “These airports are critical gateways for regional economies, connecting communities to trade, tourism and opportunity.
“As an LGPS pension pool, with assets in future expected to be upwards of £100bn, this investment demonstrates the power of collaboration between UK LGPS pension funds and global infrastructure partners to deliver long-term value and positive regional outcomes.”
Sean Greene, head of Cheshire Pension Fund, said: “This co-investment highlights the role that UK pension funds can play in supporting essential national infrastructure while contributing to regional growth and connectivity.”
Suraj Patel, associate director in the client solutions group at Macquarie Asset Management, said: “We’re pleased to further build on our partnership with LGPS Central through its co-investment into the Bristol, Birmingham and London City Airports portfolio.
“We look forward to supporting the long-term growth and development of all three airports in the years to come.”
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