The £8bn (€11.2bn) Tesco Pension Fund has become the eighth investor in the Pensions Infrastructure Platform (PIP), as the fund celebrates a year since its first investment.
The platform, set up by the UK National Association of Pension Funds (NAPF), has around £330m in assets under management, with £255m invested in infrastructure equity public/private partnerships (PPP).
Currently, five of the seven founding investors in the PIP have committed to the PPP fund, managed by Dalmore Capital, as the platform steps up its search for additional investors.
Ruston Smith, chairman of the NAPF and Tesco’s director of insurable risk, made the announcement in a speech at the NAPF Investment Conference in Edinburgh.
He said the PIP was meeting its mantra of being “for pension funds by pension funds” and was delighted to see his own fund committing to the platform.
Tesco’s career-average defined benefit scheme has around 335,000 members with an estimated 2% allocation to infrastructure, with the in-house Tesco Pension Investments (TPI) company managing strategies and manager selection.
The PIP was launched in 2011 by the NAPF in a bid to create smoother access for UK pension funds into infrastructure assets.
Ten founding investors, including the Pension Protection Fund (PPF), originally committed to the PIP, before three withdrew over cost and return issues, as it made its first foray into infrastructure assets.
Tesco’s commitment now becomes the fund’s eighth pension fund investor.
The PIP is also seeking authorisation from the Financial Conduct Authority (FCA) to manage investments in-house, a step chief executive Mike Weston said would be essential were the fund to realise its initial dream of becoming a fully fledge not-for-profit infrastructure investment house.
Speaking earlier this month, Weston said the PIP would like to grow and become more able to invest in large-scale UK infrastructure projects and that discussions had taken place over a bid for the Thames Tideway Tunnel, a £4.8bn project to update London’s ageing sewer network.