The London Pensions Fund Authority (LPFA) is investing £100m (€109m) in the London-focussed investment fund it and two local authority pension pools are launching.
London CIV has teamed up with Local Pensions Partnership (LPP) and LPFA to create the fund, which will focus on investment opportunities in the UK capital in residential property – specifically build-to-rent – and affordable housing, community regeneration, digital infrastructure, and clean energy.
The targeted offering for the fund – The London Fund – is £300m.
“Further material commitments from several London CIV client funds could see a second close in 2021 to bring the fund to capacity,” the fund partners said in an announcement.
LPP and London CIV are two of eight asset pools that have been formed by local government pension scheme (LGPS) funds in England and Wales. LPP was formed through a collaboration between LPFA and Lancashire County Council. The fund partners have more than £29bn in assets under management between them.
Local Pensions Partnership Investments is the investment manager for The London Fund and London CIV is the Alternative Investment Fund Manager. They expect to have access to a greater range of investment opportunities for The London Fund than would be available to either entity if they were acting alone.
Robert Branagh, LPFA’s CEO, said: “As responsible investors working for our communities, the opportunity to invest in London in a way that will directly benefit Londoners, is a perfect match.
“We firmly believe that we can contribute to society as well as provide attractive returns to support the pensions of our members.”
Chris Rule, CEO of Local Pensions Partnership Investments, and Mike O’Donnell, CEO of London CIV, said: “We are pleased to be part of one of the first partnerships between LPGS pool companies, bringing together investment, risk management and stewardship expertise.”
They added: “It’s a great example of local government pension schemes working together to deliver attractive risk adjusted returns with an ESG focus that provides real benefits to Londoners.
“As the nation and London recover from the impact of COVID-19, we look forward to delivering positive financial and social outcomes through the launch of The London Fund.”
Citing official UK statistics, the fund partners said London is expected to grow to a population of 9.34 million by mid-2028, which would “almost certainly put pressure on the city’s housing and infrastructure”.