The UK’s £17.6bn (€21bn) Strathclyde Pension Fund (SPF) has approved new commitments of £400m (€478m) for private equity and real estate, while also agreeing a top-up of an allocation to a Green Investment Bank offshore wind fund.
The SPF is due to increase its investment in an offshore wind farm fund managed by the UK Green Investment Bank (GIB), as the pension fund’s committee approved a £30m “follow-on investment” in Offshore Wind Fund LP.
The fund targets the acquisition of equity stakes in operating offshore wind projects in the UK.
As an investment in renewable energy infrastructure, it sits within the SPF’s direct investment portfolio (DIP).
The top-up of £30m would take to £80m the total commitment the pension fund committee has made to the offshore wind fund.
According to a document prepared for the pension fund committee, the SPF was offered more favourable terms on the follow-on investment than it was on its initial commitment of £50m, although the new terms will be extended to cover the former commitment, too.
New private equity and real estate commitments were also agreed.
They are for portfolios managed by Partners Group, which proposed the new allocations for 2016-17 to the pension fund’s investment advisory panel.
The new commitments are intended to maintain the SPF’s allocations to the Partners Group portfolios at their target level, taking into account expected cash returns in 2017.
The largest new commitment was for Partners Group’s Global Relative Value investment approach, with £230m to be invested over two years – £85m in 2016 and £145m in 2017.
This includes approved co-investments.
The SPF’s investment advisory panel also agreed a £50m commitment for direct private equity, part of the overall Partners Group private equity portfolio.
The target values for the SPF’s Partners Group private equity and property portfolios are 3% and 2.5% of the total fund, respectively.
The panel also agreed a £120m commitment for its direct real estate portfolio with Partners Group.