UK's Devon County Council Pension Fund has awarded a £40 million infrastructure mandate to Aviva Investors.
The £2.97 billion Local Government Pension Scheme (LGPS) fund is the first local authority scheme to invest in asset manager's Returns Enhancing and Liability Matching (REaLM) Infrastructure Fund, which focuses on a range of projects across the UK.Half of the investment has been committed to the REaLM Infrastructure Fund, with the other half committed to the REaLM Ground Rents Fund.In addition to the UK-focused REaLM funds, Devon has approved a €50 million (£41.66 million) investment to the First State European Diversified Infrastructure Fund.
Mark Gayler, assistant county treasurer at Devon County Council, said:
"Inflation is one of the key risks faced by pension funds. The Devon Pension Fund's investment in the Aviva Investors REaLM funds will provide protection against UK inflation, whilst offering diversification at relatively low risk."
The LGPS fund approved an increase in its infrastructure portfolio allocation from 2% to 4% in June 2013, having previously invested £30.45 million in the UBS International Infrastructure Fund in 2007.
Aviva Investors' REaLM funds have total commitments and assets of £1.6 billion as of December 2013, with the REaLM Infrastructure Fund representing £396 million of investment.