Master pension scheme Nest has unveiled plans to invest £3bn in infrastructure projects, including social housing.
Nest has committed an initial £650m and will sponsor an open-ended fund, with further capital in subsequent years and full deployment by the end of the decade.
The pension provider has appointed CBRE Caledon and GLIL Infrastructure as fund managers, targeting core and core-plus assets, with additional investment from GLIL Infrastructure. It is thought to be the first significant investment into infrastructure from a UK defined contribution pension scheme.
Projects will include seaports, fibre networks, waste and water. It will see infrastructure grow to 5% of Nest’s portfolio.
Stephen O’Neill, head of private markets at Nest, said: “Nest’s investment strategy is evolving at pace in line with the growth in our assets under management, opening up new asset classes in the pursuit of the best risk-adjusted returns for our members.
“We believe direct infrastructure equity investments can offer diversification benefits and a return premium to public market equities, at lower levels of risk.”
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