The Pensions Infrastructure Platform (PiP) has reached the first close of its PiP Multi-Strategy Infrastructure Fund (the Fund) with £125 million (US$182 million) of pension scheme investor commitments.

The Fund will invest directly in UK infrastructure with the objective of producing the stable, long-term inflation-adjusted yields required by pension schemes to meet their long-term pension payment liabilities. Pension schemes will benefit from transparent, low cost fees that reflect the true cost of operation.

The Multi-Strategy Infrastructure Fund (MSIF) invests across the capital structure directly into UK infrastructure targeting Housing, Social Infrastructure (hospitals, schools, flood defences etc.), Communications, Utilities, (Renewable) Energy and Transportation.

MSIF is open to all UK pension schemes and has a low minimum of £1m (US$1.45 million) investment hurdle to allow smaller schemes to participate and achieve similar scale benefits as larger schemes.  Other key features are:

• Target investment of £1 billion (US$1.45 billion)
• Focused on a buy-and-hold strategy to avoid any churn
• Invest to deliver long-term index-linked cash flows of RPI + 0-2% and RPI + 2-5%
• Offering an attractive co-investment programme for larger investors
• Fees reflect the true cost of operation and the benefits of increasing scale will continue to accrue to investors

Mike Weston, Chief Executive, PiP, commented:

“Reaching first close of our first fund is another key step in the development of PiP. The Founding Investor pension schemes, which have supported PiP from its establishment, have now achieved their objective of providing pension schemes of all sizes with an efficient route to direct ownership of infrastructure assets to enable greater access to infrastructure investment."

“This first close demonstrates that investors believe PiP works and is delivering on its promise. The Founding Investors have trusted the PiP team to use a portion of their scheme assets to source and take direct ownership of UK infrastructure assets on their behalf."

“With the support of our Founding Investors we’ve already mobilised £1 billion for investment into UK infrastructure. This first close, and the acquisition of infrastructure assets that will follow, demonstrates that PiP is a credible force in UK infrastructure investing.”

Isabel Liu, Non-Executive Director, PiP, commented:

“PiP was established by pension schemes for pension schemes and with the first close of its Multi-Strategy Infrastructure Fund is now demonstrating its ability to buy and own infrastructure assets on their behalf. This is fantastic news for UK pension schemes of all sizes and their sponsoring employers.

“First close of the PiP Multi-Strategy Infrastructure Fund is evidence that PiP offers a better way for pension schemes to invest in UK infrastructure.”