LPFA To Revisit PIP Investment In New Year
26 October 2012 (PLANSPONSOREurope.com) – The London Pension Fund Authority (LPFA) will make a decision about investing in the Pension Infrastructure Platform (Pip) in the new year.
In November last year the National Association of Pension Funds (NAPF) and the Pension Protection Fund (PPF) signed a memorandum of understanding with the UK government to develop the platform to assist pension funds investing in infrastructure.
And last week The BAE Systems Pension Funds, BT Pension Scheme, Pension Protection Fund, The Railways Pension Scheme, Strathclyde Pension Fund and West Midlands Pension Fund were unveiled as the founding members of the £2bn Pensions Infrastructure Platform. Together, the schemes manage over £88bn.
LPFA CEO Mike Taylor told PLANSPONSOR Europe his investment committee has initially decided they would see what the Treasury’s investment guarantees, rather than join the initial entrants.
But he added: “We are still interested in it - we may do it sometime in the future. It will probably be nearly in the new year we would look at it again.
“We would want some confidence and assurance over long-term inflation linked returns.”
Meanwhile a report from the Future Homes Commission today has recommended pension funds could be used to create a local housing development fund.
The report references the LPFA directly, claiming it has suggested it would prefer to invest in a collective and independently managed local authority property fund or funds.
According to Taylor the Authority is interested in real estate as an asset class due to its ability to provide long-term, stable inflation-linked cash flows and match liabilities.
“Housing ought to be able to provide that sort of thing provided you have the right fiscal environment,” he said.
“We are still interested and still looking but haven’t found anything that meets our needs.”