The Greater Manchester Pension Fund (GMPF) and the London Pensions Fund Authority (LPFA) are to make a joint allocation of up to GBP500m to invest in infrastructure opportunities.
The agreement is a significant step for both GMPF and LPFA. It allows the funds to increase their investment in infrastructure, deliver long-term returns that match their liabilities and provide much needed investment in major UK infrastructure projects.
Over the next three or four years, the pension funds will seek to make investments and hold them over the appropriate period for each individual investment. They will use their local presence in Greater Manchester and London to best advantage, but have a high degree of flexibility for suitable opportunities.
The structure aligns with both Funds’ responses to central government on the reform of the Local Government Pension Scheme, which called for closer collaboration between funds in order to realise the benefits of increased scale.
The Mayor of London, Boris Johnson (pictured), says: ‘I welcome this move by London and Manchester’s pension fund authorities. This brings together sizeable pension assets in an way that will enable these combined public funds to carry collective clout. This will be beneficial not only for UK infrastructure projects but also for their members.’
Susan Martin, CEO of LPFA, says: 'The creation of an infrastructure investment platform is another step towards closing our deficit. To meet our pensions liabilities we need a balanced portfolio that includes assets with a long-term profile. While at the same time by focusing on British infrastructure we are investing in an area that so badly needs it. We look forward to working with GMPF to deliver projects that will provide both for our members and at the same time support the wider social need.’
