Two Local Government Pension Scheme (LGPS) funds have invested in a portfolio of regional UK airports in a deal facilitated by the LGPS Central asset pool.
The allocation was made through a new partnership between the pool and Macquarie Asset Management, with the West Midlands and Cheshire pension funds investing an undisclosed amount via the pool’s infrastructure platform.
The airport portfolio was previously co-owned by the Ontario Teachers’ Pension Plan in Canada, and includes Birmingham Airport, Bristol Airport, and London City Airport.
It comes after the government held the Regional Investment Summit in Birmingham last month, where it announced the launch of the Sterling 20 group of institutions to invest in infrastructure and other key services. The LGPS is expected to join the initiative next year.
“This investment demonstrates the power of collaboration between UK LGPS pension funds and global infrastructure partners to deliver long-term value and positive regional outcomes.”
Richard Law-Deeks, LGPS Central
Paul Nevin, director of investment at the West Midlands Pension Fund, said: “The investment reflects our commitment to long-term, responsible investment that delivers for our members and the wider economy.
“Working through LGPS Central, we’re proud to have played a leading role in creating the co-investment vehicle, supporting this and future infrastructure investments. Strengthening regional infrastructure, including Birmingham Airport, supports jobs, connectivity and sustainable growth across the Midlands and beyond.”
Richard Law-Deeks, chief executive officer of LGPS Central, added: “These airports are critical gateways for regional economies, connecting communities to trade, tourism, and opportunity.
“As an LGPS pension pool, with assets in the future expected to be upwards of £100bn, this investment demonstrates the power of collaboration between UK LGPS pension funds and global infrastructure partners to deliver long-term value and positive regional outcomes.”
In the press release announcing the investment, LGPS Central said its approach was “an example of future collaboration” in line with the government’s ‘Fit for the Future’ reforms.
Under the reforms, LGPS Central is expected to grow its asset base to more than £100bn with the addition of at least six new partner funds.
