The platform would assist select pension funds in meeting their long term funding objectives by facilitating investment in UK infrastructure debt offering potentially better risk-adjusted returns than traditional asset classes.
The UK National Infrastructure Plan, published by Infrastructure UK in 2011, outlined a £250bn pipeline of national infrastructure needed in the UK over the five year period to 2015/16.
Graham Robinson, Global Business Consultant in the Infrastructure Sector at Pinsent Masons, explains: “The current lack of funding for new UK infrastructure will not necessarily help the UK economy recover and become more competitive, but we are confident that pension funding will become a more established way of funding infrastructure, as it is already in other countries.”
Pinsent Masons, which has one of the largest groups of pensions and infrastructure experts of any international law firm, and Redington, which has been actively promoting infrastructure investment to its clients and the wider pensions community as a way of accessing attractive, secured, long dated and often index-linked cashflows, are developing and road testing models and legal structures to facilitate access to the UK infrastructure market.
Robin Ellison, Head of Pensions Strategy at Pinsent Masons, explains: "We are looking to develop a number of ideas which will enable our clients to put the theory into practice and allow UK pension funds to provide the debt funding needed for investment in infrastructure.”
Robert Gardner, Co-Chief Executive at Redington, added:"We are focused on developing best in class solutions for our clients, which we believe will be a highly attractive and well packaged solution forUK pension funds looking to access the infrastructure market. To begin with, the platform will focus on debt funding of infrastructure and we believe it will support and supplement NAPF's Pension Infrastructure Platform.”
Conrad Holmboe, Associate at Redington, adds: “There is an increasing desire amongst our clients and the wider pensions sector to gain exposure to UK infrastructure debt, butthere are limited opportunities for them to do so in a manner tailored to their specific needs. With this in mind, we are engaging with interested pension funds and key players in the infrastructure sector to help design a platform which will facilitate this.”
A roundtable of senior executives from some of the UK's largest pension funds has already been held by Pinsent Masons and Redington, with further roundtables planned in September and later in the year.