Pension Insurance Corporation (PIC) has directly invested a further £50m of debt in the London School of Economics (LSE) to fund sustainable projects, including the development of the university’s first carbon neutral building.

The transaction follows PIC’s previous £129m investment with LSE and DIF Capital Partners to fund the development of a 676-bed student residence in London.

The investment is a £50m direct long-dated private placement, which uses a deferred drawdown structure with funds being drawn in 2027, and debt maturity tailored to match PIC’s long-term pension payments.

As part of the plans, LSE’s first carbon neutral building will include adaptable spaces for teaching, research and conferences, with sustainability, energy efficiency and carbon minimisation at the core of its design.

LSE chief finance officer, Mike Ferguson, commented: “We’re delighted to have secured this long-dated funding with PIC, which reflects both the financial strength of the LSE and its positive long-term prospects in the higher education sector.

“The team at PIC impressed us with their knowledge of the sector and flexibility in designing a funding structure that meets our commitment and ambition to embedding sustainability across our activities.”

PIC senior debt origination manager, Thomas Foucoin, added: “We are pleased to have been selected by the LSE to participate in this latest funding round. The deal highlights PIC’s track record of completing repeat transactions with our valued investment counterparties.

“We are now supporting the LSE for both its student accommodation requirements and for wider development of its education facilities and data science offering. This investment backs our future pension payments and enhances retirement security for our policyholders.”

To date PIC has invested £2.5bn in the UK’s education sector, supporting the development of educational facilities, student accommodation and direct funding needs.

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