The London Fund completes £100m first close

Local Pensions Partnership Investments, London CIV and the London Pensions Fund Authority (the “Fund Partners”) today announced the first close for The London Fund after securing £100 million investment from the London Pensions Fund Authority, toward its targeted £300 million offering.

The Fund will focus on investment opportunities in residential property and affordable housing, community regeneration, digital infrastructure, and clean energy.

Each of these assets will be selected to provide sustainable, long-term and risk-adjusted value to the pension scheme members, while creating a ‘double bottom line’ by making a positive contribution to social and environmental issues in the area.

Further material commitments from several London CIV Client Funds could see a second close in 2021 to bring the fund to capacity.

Robert Branagh, CEO of the London Pensions Fund Authority, said: “As responsible investors working for our communities, the opportunity to invest in London in a way that will directly benefit Londoners, is a perfect match. We firmly believe that we can contribute to society as well as provide attractive returns to support the pensions of our members.”

Chris Rule, CEO of Local Pensions Partnership Investments, and Mike O’Donnell, CEO of London CIV, said: “We are pleased to be part of one of the first partnerships between LPGS pool companies, bringing together investment, risk management and stewardship expertise. It’s a great example of local government pension schemes working together to deliver attractive risk adjusted returns with an ESG focus that provides real benefits to Londoners. As the nation and London recover from the impact of COVID-19, we look forward to delivering positive financial and social outcomes through the launch of The London Fund.”

With combined assets under management of more than £29.3 billion (as at 30 September 2020 for London CIV and the London Pensions Fund Authority, 31 October for Local Pensions Partnership Investments), the Fund Partners are working together to create a London-focused investment fund which aims to invest in the Capital, focusing on developing housing and infrastructure which will improve the quality of life for London communities.

The London Fund’s portfolio will focus on investments in the City of London Corporation, the 32 London boroughs and their immediate surrounds, in assets such as residential property – specifically build-to-rent – and affordable housing, community regeneration projects and infrastructure, including digital infrastructure and clean energy.

Local Pensions Partnership Investments is the investment manager and London CIV is the Alternative Investment Fund Manager. By pooling their resources and networks, Local Pensions Partnership Investments and London CIV expect to have access to a greater range of investment opportunities for The London Fund than would be available to either entity acting alone.

London is expected to be the largest-growing region in absolute terms, to a population of 9.34 million by mid-2028[1]. Whilst growth presents opportunities for residents and investors alike, it will almost certainly put pressure on the city’s housing and infrastructure. The London Fund is being created and designed to provide appropriate risk adjusted investment returns to support the ongoing growth in pension scheme assets whilst addressing the anticipated population growth challenges in the Capital, through large scale infrastructure projects/real estate investment in the Greater London area.

The fund launch is particularly well timed in the context for the need of investment in London to support an economic and green recovery post the pandemic.

[1] Subnational population projections for England: 2018-based, Office of National Statistics March 2020.