Two more pension funds have signed up to the Pensions Infrastructure Platform (PIP) which has so far reached £1 billion in investment capital.

The London Pensions Fund Authority (LPFA), which administers a £4 billion pension fund to local authority and not-for-profit employees, is one of the latest signatories and will invest £100 million, joining nine other organisations that have made a soft commitment to invest the same amount.

In the long run, the association’s newly elected chairman Edmund Truell said the aim is to see its total investment to infrastructure reach £700 million. He said the plan is to merge the pension funds of London local authorities into one fund in order to further invest in infrastructure projects.

Truell said: “It’s part of my objective or indeed mandate to try to consolidate the management of those various boroughs into one fund for London.
“If we can be successful in amalgamating public sector pension funds then we can unlock billions of pounds then, people in my team can deploy that money into much needed housing, schools and hospitals infrastructure.

“At the moment, the blockage is with local authorities who are not relinquishing control of their pension funds to organisations like the LPFA who can put that money to work. So we need to urgently see the public sector local authority pension funds give up their vested interests and make sure it all gets consolidated into a few well managed sizeable pension fund operations.”

The 33 London local authorities are yet to agree to this.

Lloyds TSB is the other pension fund to join the project. Lloyds TSB Group Pension Schemes Chairman of the Investment and Funding Committee Eric Stobart said: “We are pleased to have become a founding investor in the PIP and look forward to working with the other founders in developing the proposition. Infrastructure, when available in appropriate structures, should be an attractive asset class to UK pension schemes and the PIP should be an important step in making infrastructure more accessible.”

PIP aims to reach an overall investment of £2 billion into pre-existing infrastructure projects. Investments to the project will be inflation-linked and the fund is seeking long-term cash returns of RPI +2 to 5%.

The two latest funds join British Airways Pension Scheme, BAE Systems Pension Funds, BT Pension Scheme, Pension Protection Fund, the Railways Pension Scheme, Strathclyde Pension Fund, and West Midlands Pension Fund. One other pension fund has signed up to the scheme but is yet to be named.

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