Local Pensions Partnership Investments Ltd (LPPI) has set up the LPPI Real Estate Fund to pool the property assets of three public sector pension schemes that it manages.
The LPPI Real Estate Fund has launched with over £800 million of direct UK property investment assets and a further £460 million of property assets are due to transition to the Fund over the coming months. As capital is deployed to meet the pension schemes’ agreed allocations to real estate, the LPPI Real Estate Fund is expected to reach around £2 billion assets under management.
The move offers the schemes a more diversified exposure to a wide range of UK and international real estate. The Fund brings improved scale and other efficiencies in an asset class that can generate stable and resilient income.
The launch of the LPPI Real Estate Fund brings the number of distinct asset class specific investment pooling vehicles that LPPI offers its clients to eight, with each pooled fund focussing on long-term resilience and returns. The LPPI Real Estate Fund is a sub-fund of an Authorised Contractual Scheme (ACS) managed by LPPI.
Chris Rule, CEO of LPP, said:
“The LPPI Real Estate Fund represents another important milestone in LPPI’s three-year history. We now manage more than £17 billion of pension assets on behalf of our clients and their members. We are extremely proud of LPPI’s record in delivering a diverse range of high quality, low cost and distinctive investment propositions to meet clients’ asset allocation requirements.”
Approximately £1.7 billion of real estate assets have, until now, been managed by LPPI via separate mandates for each of LPPI’s pension fund clients, namely the Lancashire County Pension Fund (LCPF), the London Pensions Fund Authority (LPFA) and Royal County of Berkshire Pension Fund (RCBPF), most of which will transition into the Fund.
“We expect to grow LPPI Real Estate ACS’s assets to approximately £2.0 billion over the next three years.”
LPPI has launched the following investment funds and structures focused on specific asset classes since it started operations in April 2016⁺:
- £651 million Fixed Income Fund
- £1.4 billion Credit Fund
- £1.3 billion Global Infrastructure Fund
- £1.2 billion Private Equity structure
- £6.7 billion Global Equities Fund
- £800 million Diversifying Strategies Fund
- Liquidity Fund [approved by the FCA in October 2016 but not yet launched]
⁺All fund sizes are as at 31 March 2019 The LPPI Real Estate Fund is managed by Local Pensions Partnership Investments Ltd, a wholly owned subsidiary of Local Pensions Partnership Ltd. Local Pensions Partnership Investments Ltd is authorised and regulated by the Financial Conduct Authority.
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