Two Local Government Pension Scheme (LGPS) asset pools are to launch a property management subsidiary to oversee their combined real estate portfolio and invest a further £1bn into the housing market.
Northern LGPS and Local Pensions Partnership Investment (LPPI) are establishing Four Corners to manage 5,478 rental homes the two pools own across England, Scotland and Wales. It is set to become one of the biggest rental housing operators in the country, with the two owners planning to invest £1bn through it over the next decade and expand the portfolio by more than 15,000 homes.
The pools acquired a housing portfolio in December as part of a long-term strategy to invest in the UK’s rental housing market. In a statement, Northern LGPS and LPPI said the venture was a direct response to the government’s drive for the LGPS to invest more in local and regional assets across the UK.
“We believe this demonstrates how LGPS capital can play a meaningful role in addressing housing needs while generating value for current and future pension members.”
John Dewey, chief investment officer at Northern LGPS, said the launch marked “an important milestone” for the pool’s “commitment to investing in UK housing and communities”.
“It reflects our ambition to support the UK’s need for more high-quality rental housing, using long-term pension capital to invest in assets that can deliver both resilient financial performance and wider economic and social value,” he added. “We believe this demonstrates how LGPS capital can play a meaningful role in addressing housing needs while generating value for current and future pension members.”
Louise Warden, real estate and infrastructure investment director at LPPI, said Four Corners “underlines the power of cross-pool collaboration” as well as providing the opportunity to scale up investment in sustainable property.
“A rental home should provide the same sense of security and stability as any other home,” Warden said. “That’s the principle Four Corners has been built on.
“By managing our properties directly, we can take greater responsibility for residents’ everyday experience while continuing to invest in the communities they call home.”
GLIL acquires stakes in aquaculture and data centre firms
GLIL, an infrastructure specialist set up by LGPS pools, has acquired two new assets for its portfolio.
It has taken up a minority stake in Norwegian company Sølvtrans from Antin Infrastructure Partners, with the aim of supporting the boat operator’s expansion to new territories.
Jonathan Ord, head of direct infrastructure at LPPI, one of GLIL’s investors, said: “Sølvtrans is the global market leader in wellboat services, with a significant presence in Scotland. We’re thrilled to be collaborating with Antin and the management team at such an exciting time for aquaculture, an industry whose infrastructure is critical to communities around the world.
“We’ve seen first-hand what can be achieved when long-term patient capital is combined with a partnership-led approach. We can’t wait to get started.”
Separately, GLIL has also bought a majority stake in a data centre site in Slough operated by Yondr Group. The site includes two “hyperscale” data centres, according to a press release from Yondr.
Lee Belfield, an investment director at LPPI and GLIL, said: “Digital infrastructure is increasingly fundamental to the UK’s economy, and hyperscale data centres are critical to supporting growing demand for cloud services and artificial intelligence. This investment reflects GLIL’s strategy of partnering with high-quality operators to invest in essential infrastructure that delivers resilient, long-term value for our pension fund members.”
Both transactions are expected to close in the next few months.
British Business Bank adds engineering tech firm to portfolio
The British Business Bank has invested $25m (£19m) into PhysicsX, an AI company providing technology to the industrial sector. The investment is held in the British Growth Partnership Fund I portfolio, which raised £200m last year from pension investors including Aegon, Cushon and M&G.
UK-based PhysicsX supplies modelling and simulation software to sectors such as aerospace and defence, semiconductors, data centres, energy production, automotive, and materials.
Ian Connatty, managing partner at the British Growth Partnership and deputy CIO at the British Business Bank, said, “The British Growth Partnership was created to connect pension funds with the UK’s fastest-growing companies. This transaction shows that model in action, and that we have built a platform for domestic pension fund capital to flow into the UK’s technology leaders.”
