- Fund aims to stimulate development and enterprise in the capital
- Investments set to include residential property/ affordable housing, regeneration, digital infrastructure and clean energy
Three major London pensions organisations, with combined assets under management of nearly £57 billion, are working together to create a London-focused investment fund. The fund aims to invest in the Capital, focusing on developing housing and infrastructure, both of which will improve the quality of life for London communities.
Local Pensions Partnership Ltd (LPP), the London Collective Investment Vehicle Ltd (LCIV) and the London Pensions Fund Authority (LPFA) are expecting to jointly target an allocation of several hundred million pounds to this new investment strategy, which is planned to launch later in 2020.
The London Fund’s portfolio will focus on investments in the City of London, the 32 London boroughs and their immediate surrounds, in assets such as residential property – specifically build-to-rent – and affordable housing, community regeneration projects and infrastructure, including digital infrastructure and clean energy.
Each of these assets will be selected to provide sustainable, long-term and risk-adjusted value to the pension scheme members, while creating a ‘double bottom line’ by making a positive contribution to social and environmental issues in the area.
The fund, which will have a closed-ended structure, will be managed in partnership between LPP Investments Ltd (LPPI) and LCIV. By pooling their resources, LPPI and LCIV expect to have access to a greater range of investment opportunities for The London Fund than would be available to either entity acting alone.
London’s population is expected to grow to over 9.5 million people by 20261, faster than any other UK city. Whilst growth presents opportunities for residents and investors alike, it will almost certainly put pressure on the city’s housing and infrastructure. The London Fund is being specially created and designed to address these challenges in a long-term sustainable way, as well as providing a boost to pension scheme members through the return on investment in large scale infrastructure projects around the Capital.
A spokesperson for The London Fund said: “Through the collaborative efforts of these London based institutions, the London Fund is expected to benefit from increased scale. This allows us broader access to resources and a much wider investment pipeline than would be available to any of the individual organisations acting alone. We are delighted to be able to develop a project that will provide attractive returns for our members while helping us support communities in London.”
1 ‘Subnational population projections for England: 2016-based’, Office of National Statistics 2018