Nest has made its first major investment through IFM Investors, with a €530 million investment (around £450 million) to seed a new infrastructure debt fund.
Infrastructure specialist IFM Investors is owned by 15 Australian ‘superannuation’ pension schemes — and earlier this year Nest became the first overseas provider to be a co-owner of this manager. This is Nest’s first major investment with IFM since this partnership was finalised.
As part of the partnership, Nest and IFM have committed to co-creating investment strategies which focus on private market opportunities across the UK and Europe.
The launch of the infrastructure debt fund will amplify investments into private markets, including assets in the UK such as UK fibre, wind, waste to energy, bus, or rail infrastructure.
The move supports IFM’s global expansion into new investment opportunities and markets, while also supporting Nest’s ambition to diversify and increase its allocation to private markets from 17 per cent to 30 per cent of assets under management by 2030.
The infrastructure debt fund aims to deliver attractive relative value in sub-investment grade infrastructure, with the aim to enhance risk-adjusted returns for Nest’s 13m-plus UK members.
Nest intends to invest £5bn in private markets through IFM by 2030.
Nest’s commitment to this new fund aligns with its signing of the Mansion House Accord earlier this month. The Accord sees 17 of the largest workplace pension providers in the UK express their intention to invest at least 10 per cent of their defined contribution (DC) default funds in private markets by 2030, with 5 per cent of the total allocated to the UK.
Commenting on this latest deal the minister for pensions Torsten Bell says: “I welcome the steps Nest, and the wider pensions industry, are taking to invest in more productive assets, from growing companies to infrastructure.
“This demonstrates the real appetite behind pension funds signing up to the Mansion House Accord and the positive outlook on the UK private markets.
“Working together, government and industry will deliver the investment to drive future prosperity, supporting better outcomes for savers and faster growth for Britain.”
Nest chief investment officer Liz Fernando adds: “Seeding this global infrastructure debt fund provides our members with access to diversified, world-class investment opportunities, and investments back in their communities and the infrastructure they use.
“We know the importance of investing in the UK, and that’s why we have signed up to initiatives like the Mansion House Accord. This new IFM fund further shows our commitment to supporting the UK economy and gives a significant boost to our ambition to almost double our assets under management (AUM) into private markets to 30 per cent by 2030.
“We’re pleased to have taken this exciting first step with IFM, one of the world’s leading global infrastructure investment managers. We came together to develop sophisticated investment strategies like this one, and we look forward to co-creating more opportunities on behalf of our members.”
IFM Investors head of debt investments David Cooper says: “IFM exists to invest, protect, and grow the long-term retirement savings of working people.
“Investing in infrastructure is critical to powering the digital economy, cutting carbon emissions, and driving the energy transition. Private debt capital is a key enabler—offering strong relative value for investors and, most importantly, their members.
“By partnering with organisations like Nest, IFM is working to deliver better retirement incomes for workers across the UK.”
