Nest is buying a 10 per cent stake in the holding company of Australian private markets manager IFM, the fourth largest infrastructure manager in the world.
It has not disclosed the fee paid for its stake in the IFM’s holding company, Industry Super Holdings, but says the deal enables it to drive better terms on charges.
The deal sees Nest join 16 other Australian not-for-profit, or profit-for-member as they are known domestically, Super providers as co-owners of the manager.
Nest and IFM will invest in IFM’s infrastructure, debt, and private equity capabilities –
with a key focus on new UK investment opportunities. The strategic partnership will support Nest’s ambition to diversify and increase its allocations to private market assets to 30 per cent. Nest aims to invest around £5bn through IFM by 2030.
Existing holdings include the M6 toll road as well as Manchester, Stansted, and East Midlands Airports.
IFM’s existing owners manage retirement savings of over GBP £580 billion (A $1trillion), making IFM’s ownership structure distinctly different to those around the world.
Mark Fawcett, CEO of Nest Invest, said that the Department for Work and Pensions was only told about the deal a few days ago. “We very much want to keep politics out of our investment strategy,” he said at a press briefing on Tuesday. “Nest is proud to be recognised as an international player within the global pensions industry. By joining
forces with IFM, one of the world’s leading infrastructure managers, we are taking a crucial step towards our goal of investing 30 per cent of our assets under management (AUM) into private markets by 2030.
“We’re excited to leverage IFM’s expertise and scale to unlock more private market opportunities that can drive stronger and more impactful returns for our members.
“With £10 billion of our AUM already invested in the UK, our goal is to grow this to £20 billion, and our partnership with IFM will be instrumental in helping us get there.”
Commenting on the announcement, David Neal, IFM Investors CEO, said: “IFM is owned by some of the fastest growing pension and super funds in the world, who recognise the advantages to members when they invest in private markets through a collectively-owned manager.
“Nest will support IFM’s further expansion into new investment opportunities and markets across the globe, bringing UK expertise into IFM’s ownership group, as we seek to give pension fund members greater access to global markets that have the potential to deliver risk-adjusted returns for their retirement.”
Brendan McCafferty, Nest’s Chair, said: “At Nest, we believe that no investment opportunity should be out of reach for everyday pension savers.
“Our new partnership with IFM demonstrates our ongoing commitment to using every tool in our toolbox to boost our members’ risk-adjusted returns. Together with IFM, we’ll be able to further enhance our sophisticated investment options for everyday UK pension savers, aiming to help them build a more secure retirement.
“With more than a third of the UK workforce saving with Nest, access to more private investment opportunities will allow us to increase investment into our members’ jobs, communities, and essential infrastructure, like roads and bridges.”
Cath Bowtell, IFM Investors Chair, said: “This new partnership with Nest reflects the scale of the Australian super system and further demonstrates the influence it commands around the world. This is a historical milestone in IFM’s history and has come about because of IFM and Nest’s shared purpose – to invest, protect and grow the long-term retirement savings of working people.”
The completion of the transaction is subject to certain conditions, including shareholder and regulatory approvals, which Nest and IFM anticipate being satisfied before the middle of 2025.
IFM operates globally from offices in Melbourne, Sydney, London, Berlin, Zurich, Amsterdam, Milan, Warsaw, New York, Houston, Hong Kong, Seoul and Tokyo. It manages investments across infrastructure equity, debt, listed equities and private equity assets.
