The initiative is being taken by five
local government pension funds, who seek investments
that have an economic impact as well as
positive social and environmental
outcomes in the UK.
The available investment capacity comes from local communities, which have contributed to the funds over many years. Therefore the pension funds’ investment is to be used for the benefit of these communities.
The initiative follows earlier work undertaken by the Smith Institute, CLES, the Local Authority Pension Fund Forum and PIRC to identify possible challenges to these types of investments. As a result the report Local Authority Pension Funds: Investing For Growth was published last year. Pensions Investment Research Consultants Ltd (PIRC) has been appointed as a consultant to the group of funds.
The sponsoring funds have collectively committed £250m,
subject to suitable investment opportunities. Other pension funds are monitoring this action and substantial further commitments could follow
Investments are to be conducted by asset managers, who have the appropriate skills, knowledge and experience for this type of investments. The initiative offers asset manager the opportunity to develop impact investing strategies that pension funds and other investors are seeking, which will allow them to enter into or expand their activities in this market
Asset managers are invited to put forward for consideration current or proposed investment opportunities that have appropriate risk and return characteristics suitable for the investment market, where the underlying UK investments have a targeted positive economic impact on UK communities. Different and diversified investment activities are possible: fund of funds approach or funds compiling a portfolio of investments diversified across a number of varied investment activities. Underlying investments could include infrastructure, resource management, and business development.
Investment proposals ought to conform to the initiative’s requirements. Interested asset managers are advised to read the full invitation and detailed requirements and to attend the information meeting to help inform submissions.
Submissions should be sent electronically to firstname.lastname@example.org.