By Chris Panteli and Sebastian Cheek
Tesco has become the latest member of the Pension Infrastructure Platform (PIP), bringing the number of schemes participating to eight.
National Association of Pension Funds (NAPF) chairman Ruston Smith, who is also Tesco’s director of insurable risk, made the announcement during his opening speech at the NAPF Investment Conference in Edinburgh on Wednesday.
Smith told delegates: “I remember Joanne Segars [NAPF chief executive] telling me a story about when she was setting up the PIP. She told me how some predicted the founding investors would never get the PIP off the ground – and wouldn’t be sustainable. Some infrastructure managers had suggested to her that pension funds should accept and put up with the fees they were charged.
“But pension funds weren’t prepared to ‘put up with it’ and that’s why… I’m pleased to say that my own scheme has become the latest pension fund to become an investor in the PIP.”
Tesco joins seven other UK pension schemes on the platform: the £18bn Lloyds TSB Group Pension Schemes, the British Airways Pension Scheme, the £8.6bn West Midlands Pension Fund, the £18bn Railways Pension Scheme, the £11.3bn Strathclyde Pension Fund, and the £10bn Pension Protection Fund.
When PIP launched in October 2012 it had a commitment from 10 funds, but three – the £36bn BT Pension Scheme the £18bn BAE Systems Pension Funds and the £4.1bn London Pensions Fund Authority – subsequently pulled out.
To date the PIP has announced two funds. The first – launched in February last year – is a PPP fund managed by Dalmore Capital with more than a third of a billion pounds invested. The second fund, launched last month, is a solar PV fund managed by Aviva Investors.
The PIP is a not-for-profit, infrastructure fund, “by pension funds and for pension funds”, aligned to the long-term interests of the UK pension funds who will be its main investors. It launched with a target size of £2bn expected to invest at the low-risk end of the infrastructure asset spectrum.
In September last year, former Daily Mail and General Trust CIO Mike Weston was appointed as CEO of the PIP.
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