Local authority pension pooling vehicles Brunel Pension Partnership and London CIV have launched new private market funds with commitments from their pension fund clients totalling £1.7bn (€1.96bn).
Brunel is working with Aksia, a specialist research and advisory firm, to build a bespoke portfolio of funds targeting corporate direct lending strategies in Europe and North America.
Pension funds served by Brunel have committed £945m to the pooled fund.
Brunel will make six to eight primary fund commitments to specialist direct lenders. The “Cycle 2” vehicle has already made one commitment to a Europe-focussed fund, ICG Senior Debt Partners IV, and Brunel said a second commitment, to a US-focussed manager, “is expected to follow close on its heels”.
Brunel said that, with Aksia’s help, it intended to “push the boundaries of responsible investment in direct lending”.
“The attractions of this asset class for our clients are clear, but the challenges of implementation in this climate are clear, too,” said Richard Fanshawe, head of private markets at Brunel.
“We needed a partner, not just a manager and, in Aksia, we have both.”
London CIV adds renewables, mid-market loans
Separately, London CIV, the asset pooling vehicle for 32 London public pension funds, has launched private debt and renewable infrastructure funds with £725m in initial commitments.
The renewables fund has an open-ended structure and will invest in greenfield and brownfield assets.
Subject to final due diligence and legal agreement, London CIV will use funds managed by BlackRock Investment Management, Foresight Group, Quinbrook Infrastructure Partners, and Stonepeak Global Renewables Advisor.
Five of London CIV’s London pension fund clients have committed an initial £435m to the renewables fund. London CIV said it expected to see a further six pension funds invest more than £300m at the subsequent close.
The private debt fund is closed-ended and for loans to European and North American middle market companies. London CIV has selected funds by Churchill Asset Management and Pemberton Asset Management.
The new private debt fund has been seeded by three London pension funds with a total commitment of £290m, while a further three are said to be expected to invest more than £150m by the end of the year. The fund will remain open for further commitments from London CIV client funds for the next 12 months.
As of 31 March, London CIV had £12.59bn in assets under management, including commitments. The funds announced this week come on top of a private markets offering that includes the London Fund, an infrastructure fund, and an inflation-linked real assets fund.
Mike O’Donnell, CEO of the London CIV, said the new launches and commitments were “a key milestone for London CIV and a reflection of our ongoing collaboration with our client funds through the London CIV seed investment groups”.
“Launching the funds by the end of March was a challenging target, but we have, nonetheless, succeeded in demonstrating our commitment to delivering the right solutions for our investors and on time,” he added.