UK's PIP makes first investment with in-house multi-strategy fund

The UK’s Pensions Infrastructure Platform (PIP) has completed its first deal with its inaugural in-house fund, acquiring debt in a rooftop solar provider.

The £27.5m (€32.7m) investment will be used to refinance debt of an unnamed UK solar power provider, the fund manager said in a statement.

PIP said the investment, facilitated by Novatio Capital, met all criteria for its Multi-Strategy Infrastructure Fund (MSIF), which is targeting a £1bn capital raise and by its first close in April had attracted £125m from the West Midlands Pension Fund, Strathclyde Pension Fund and others.

The inflation-linked debt, with a 20-year maturity, will be used to refinance a portfolio of 2,399 rooftop solar assets across England and Wales with a capacity of 6.7 megawatts.

Mike Weston, chief executive of PIP, hailed the investment as a “milestone” for the manager.

“We are pleased to have been able to work with Novatio Capital to structure and execute a transaction that provides our investors with the secured, long-term, inflation-linked cash flows they are seeking to support their accrued pension payment obligations,” he said.

Speaking with IPE Real Estate earlier this week, Weston alluded to further deals.  

“We’re working on opportunities as we speak, and we have a decent pipeline of opportunities stretching through the remainder of this year into next year,” he said.

“There’s a lot of activity around in the market. Clearly, not all of it is appropriate to PiP, but we’ve not struggled to find things to work on.”

The MSIF is the first internally managed fund for PIP, which is owned by a number of the UK’s largest pension funds, including the Pension Protection Fund and Strathclyde.

To date, PIP’s investments have been overseen by two external managers.

Dalmore Capital in 2014 launched a £500m public/private partnership fund on behalf of PIP, and also helped attract a number of pension funds to the £4.2bn Thames Tideway Tunnel project.

A second fund was launched in 2015, managed by Aviva Investors and exclusively targeting renewable power assets.