PPF gains 25% investment return in 12 months

The figure in its annual report follows the day after the PPF committed £100m to its pension infrastructure partnership (Pip) alongside the Railways Pension Scheme, the Strathclyde Pension Fund, and the West Midlands Pensions Fund.

The PPF attributed its investment success to better-than-expected returns on its hedging assets, and a strong performance from its £1bn allocation to alternative investments, which include infrastructure.

PPF chairman, Lady Barbara Judge, said: “Our overall performance should give our members continued confidence in our commitment to provide their retirement compensation for as long as they need it.”

The fund’s £100m new allocation to infrastructure will be invested in 2013 in a fund whose managers will be employed by the pension fund investors, thereby reducing charges.

The chief executives of the National Association of Pension Funds and the PPF, Joanne Segars and Alan Rubenstein, told reporters that it was too early to talk about specific projects, but revealed the parties were interested in funding schools and hospitals, depending on the government’s proposals for the Public Finance Initiative.

Rubenstein acknowledged initial plans to get the project underway by January 1 were now unlikely and that “early 2013” was a more realistic timescale.

“It’s fair to say that when we set the original timeline, we were targeting January and that was because we wanted to set ourselves a tough target,” he said.

“It’s very clear where we are now; we’ve got the founding investors, so we can move forward. But again, realistically we’re unlikely to launch in three months’ time.”

Segars said: “This is excellent progress and marks an important milestone in the Pip’s development. There is a lot of work to do, but we are confident of making further progress and launching next year.”

Both the NAPF and PPF hope to secure £1bn before opening up the funds to other schemes in 2013 to eventually meet its £2bn target.