A group of five local authority pension schemes have announced plans to form a £250m investment fund which will back infrastructure projects boosting economic growth.
The Greater Manchester, West Yorkshire, West Midlands, South Yorkshire and Merseyside schemes have each committed an initial £50m for the initiative and are now seeking to appoint an investment manager.
They are seeking to identify projects that meet their investment criteria for return and risk, but also have a positive economic impact by benefitting local communities and addressing current economic challenges.
Among the areas which could be considered for investment are roads, energy, water, waste and regeneration projects.
Councillor Kieran Quinn, chair of Greater Manchester Pension Fund and leader of Tameside Council said: 'A pension fund has an overriding responsibility to make a financial return that will assist it in meeting its pension liabilities without taking unreasonable risks, but it is clear that in meeting these criteria there are investment opportunities that will also deliver an impact on local communities that improves their economic wellbeing, including social and environmental outcomes.
'Funds have taken a number of such investment opportunities and this initiative is not only to establish the depth and breadth of the current market, but to challenge asset managers to bring opportunities forward on sufficient scale to match the investment allocations pension funds are prepared to commit.'
The initiative aims to build on a report published last October by think-tank the Smith Institute, which called on pension funds to pool their assets. Earlier this week, local government minister Brandon Lewis announced a full-scale review of how the Local Government Pension Funds invest, including the potential for funds to merge.
