Avon Pension Fund and Dorset County Pension Fund have awarded a combined £227 million (US$355.6 million) infrastructure mandates to IFM Investors.
Avon Pension Fund and Dorset County Pension Fund made their £187 million (US$293 million) and £40 million (US$62.7 million), respectively, allocations to IFM Investors following a collaborative procurement process. During the process they were advised by JLT Employee Benefits.
The mandates will be invested in IFM Investors' portfolio of core equity infrastructure assets in global developed markets.
According to Matt Betts, Avon Pension Fund assistant investments manager, the decision to invest in infrastructure came after a review of their investment strategy in 2013. Mr Betts added:
We wanted to diversify our assets, and looked to infrastructure due to its inflation linked, cash generating and liability-matching qualities. IFM Investors' portfolio and open-end investment structure, that allows allocations to be made for the long-term, were very attractive to us.
This reflects the increasing appeal of the asset class as schemes look for sources of uncorrelated returns that can effectively match long term liabilities.
Annabel Wiscarson, IFM Investors executive director business development, commented:
Avon's first allocation to infrastructure is both a hugely significant step for the scheme and notable within the broader industry for its size, which far surpasses the average amount being invested by UK local authorities to date.
IFM Investors is one of the world's largest infrastructure managers. The firm has £13 billion in infrastructure equity and debt assets.