Saturday, May 25, 2024

LGPS Central commits £220m to UK infrastructure debt via Macquarie fund

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The asset pool for eight UK local government pension schemes (LGPS) in the Midlands has made a £220m (€257m) commitment to UK infrastructure debt through a Macquarie-managed inflation-linked income fund.

LGPS Central said it has committed the capital to Macquarie Inflation Linked Income (MILI), a fund that has made an initial investment of around £33m in long-term financing to enable the upgrade and expansion of three healthcare facilities for NHS Trusts across the Midlands. 

MILI focuses on largely inflation-linked opportunities financing economic and social infrastructure in the UK.

LGPS Central said partner pension funds involved in the MILI fund investment include West Midlands Pension Fund and Cheshire Pension Fund.

The £56bn asset pool’s partner funds include Derbyshire Pension Fund, Leicestershire County Council Pension Fund, Nottinghamshire Pension Fund, Shropshire County Pension Fund, Staffordshire Pension Fund and Worcestershire Pension Fund. 

Nadeem Hussain, the head of private markets at LGPS Central, said: “This investment in the MILI fund is an encouraging step forward in further diversification in our private market strategy. Investing in sub-sectors such as healthcare infrastructure contributes to wider social benefit, whilst maintaining the paramountcy of our fiduciary duty.

”We are particularly pleased with the local significance of the initial investments, underscoring our commitment to our community at Central.” 

Hugo James, managing director at Macquarie Asset Management, said: “We are very proud to help finance their expansion and modernisation on behalf of our investors, including LGPS Central – using local government pension scheme savings from the Midlands to enhance infrastructure for the region.” 

Macquarie said the projects being financed include the refurbishment and further development of administration, communal and retail spaces at the Princess Royal Hospital in Telford and Warwick Hospital. The financing also enables the development of a new multi-storey carpark with 875-spaces at the Royal Derby Hospital.

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