The Parliamentary Contributory Pension Fund – the retirement scheme for members of the UK parliament – is among the cornerstone investors in a £375m social infrastructure investment fund.
Alongside an unnamed fund within the Local Government Pension Scheme (LGPS), the MPs’ pension scheme has contributed to a first close of £100m for the Newcore Social Infrastructure Income Fund.
The Newcore fund has a target size of £375m and has identified a pipeline of around £300m of potential acquisitions across the UK. According to a press release, it aims to boost social infrastructure in areas including education and transport.
The investment strategy will seek to reduce under-utilised vacant spaces, create new infrastructure in alignment with net zero targets, and acquire existing functional buildings with the aim of increasing the provision of social infrastructure space.
The Parliamentary Contributory Pension Fund and the LGPS fund are joined by an insurance company as the cornerstone investors in the new fund.
Hugo Llewelyn, Newcore Capital’s chief executive officer, said the initial capital raise had been secured “against the backdrop of a particularly difficult capital-raising market”.
He added that the initial close “demonstrates that a clear three-dimensional focus on sustainability – financial, environmental, and social – can deliver positive results for fund managers, by securing commitments from high quality investors with similar aspirations for their capital”.
The commitment represents another step by pension funds towards investing in infrastructure with social purpose and an eye on developing UK assets.
LGPS funds are being encouraged by the UK government to invest in domestic assets. But at a recent Pensions Expert roundtable, Nick Dixon, head of pensions at Avon Pension Fund, observed that local communities can in some circumstances object to projects.
Jonathan Ord, head of investment at GLIL Infrastructure, emphasised the importance of community engagement. He argued that many of these assets are essential infrastructure needed for society to function, and this must be balanced with local perspectives and preserving an area’s natural beauty.
