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London pension pool launches infra fund, preps real estate vehicles [updated]

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London CIV, the asset pooling vehicle for the UK capital’s local authority pension funds, has launched its first infrastructure fund and is preparing to launch several vehicles for real estate.

Six London pension funds have committed £399m (€455m) to the infrastructure fund. London CIV said it had partnered with StepStone – selected earlier this year – to “support investment selection, portfolio construction and reporting services”.

The vehicle has been set up to make new investments, although a spokesperson said “there is sufficient flexibility” to “consider in-specie funds from our local London authorities”.

Asked why only six of the 32 London pension schemes had committed capital, the spokesperson said: “Different local London authorities are at different stages of their strategic asset allocation reviews and some decided not to hold strategic asset allocations to infrastructure.

“We do expect many more local London authorities to commit in subsequent closes.”

Its first investment will be in an unnamed renewable energy fund that will focus on wind and solar power in Europe.

Larissa Benbow, a member of the London CIV investment team, said: “We hope to provide a diversified infrastructure offering which seeks to incorporate deep research and a keen focus on environmental, social and governance issues to ensure it delivers for all investors.”

The infrastructure fund is London CIV’s 14th sub-fund. It was initially slated for launch in 2018 but was delayed following a review of the pooling vehicle’s structure, operations and governance. As at the end of September, London CIV had £8.7bn of assets under management.

The London CIV spokesperson said the pool was “currently working towards the early stages of fund launch for three potential property funds”.

She added: “More information on these will come in 2020.”

London CIV is currently looking for a chief investment officer, after Mark Thompson resigned last month. The former HSBC UK pension fund CIO had only been in the role for a few weeks, and stepped down for personal and family reasons.

Earlier this year, IPE Real Assets reported that London CIV was seeking to appoint a head of real assets.

[This article was updated to correct a previous reference to StepStone managing the fund.] 

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