(London) Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), and the Pensions Infrastructure Platform (PiP) have today announced the launch of PiP’s first solar photovoltaics (PV) fund with Aviva Investors as the fund manager.
The fund aims to deliver predictable, long-term inflation-linked cash flows through investing in small-scale solar PV installations in the UK. The return objective is materially to outperform inflation-linked government bonds, with the fund expected to generate quarterly income for pension fund investors.
Mike Weston, Chief Executive of PiP, said:
“The launch of this second fund within a year is an important addition to the PiP – we said we would make a renewables fund available through the PiP and that’s exactly what we have done. The fund broadens the investment opportunities on offer, and on market-leading terms of 50bps with no performance-related element it will deliver real value to pension schemes.
“PiP remains committed to making infrastructure work for pension funds of all sizes, offering investors a low-risk, long-term investment that provides inflation-linked cash flows. We are particularly pleased to be working with Aviva Investors to launch this fund and to be able to put their expertise in this area to work for pension schemes.”
Ian Berry, Head of Infrastructure at Aviva Investors, said:
“Since 2010, when we identified the opportunity to create institutional quality investments in small-scale solar PV in the UK, we have led the market in terms of number and scale of investments made.
“We believe that this new fund and our partnership with PiP will enable an increasing number of UK pension funds to benefit from this expertise. Our investment proposition in infrastructure responds to our clients’ need for outcome-oriented solutions, offering a secure income alternative that can provide attractive risk-adjusted returns in projects that are unleveraged, long-term and inflation-linked – all of which underpin this new fund.”
Alan Goodman, Senior Portfolio Manager, Pension Protection Fund, said:
“We became a Founding Investor of the PiP because we saw the need for a platform to provide pension schemes with access to the important asset of infrastructure in an affordable and suitable way. Today’s announcement marks the continued and successful growth of the PiP and we remain committed to this project.”
The fund will have a hard cap of £250m and first close of the fund is expected in Q2 2015. Returns of the fund are expected to be in line with the key feature of the PiP, at RPI+2-5%.
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Notes to Editors
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Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions and services to clients worldwide. Aviva Investors operates in 15 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £240 billion as at 30 September 2014.
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PiP and the NAPF
The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
PiP is a not-for-profit, infrastructure business being developed for pension funds, aligned to the long-term interests of the UK pension funds who will be its main investors. This is the first time UK pension funds have combined to create such a financial entity in the UK. Key features of the PiP are:
- Target size of £2bn
- Low fees, c50bps
- Low risk, PiP is expected to invest at the low-risk end of the infrastructure asset spectrum
- Long-term cash returns of RPI+2-5% (i.e. as a liability match)
Pensions Infrastructure Platform Limited (PiP Limited) will continue to facilitate the development of the PiP. PiP Limited is a company limited by guarantee, which is presently wholly owned by National Association of Pension Funds Limited (NAPF Ltd).
Pensions Infrastructure Platform Limited is an appointed representative of Hutchinson Lilley Investments LLP which is authorised and regulated by the Financial Conduct Authority.
Pensions Infrastructure Platform (PiP)
Cheapside House, 138 Cheapside, London, EC2V 6AE
Telephone: 020 7601 1745