LGPS Central is the cornerstone investor in a new evergreen Inflation-Linked Infrastructure Debt Fund (ILID), which has been launched by UK-based investment company abrdn.
The Local Government Pension Scheme (LGPS) pool with combined assets of approximately £49bn has invested £220m into the fund.
ILID will invest in a broad range of inflation-linked private infrastructure debt in the UK and aims to target sectors that include: clean energy generation, storage and distribution; transport; and social infrastructure.
Mike Gillespie, LGPS Central’s investment director for private debt, said: “This is a strategic cornerstone investment, a first for our stable return private debt sleeve.
“The outcome is a fund that meets our exacting requirements, and we believe, will prove to be a highly compelling proposition for other investors including other LGPS pools.”
The fund aims to provide inflation protection combined with credit and illiquidity premia, allowing a capital-efficient, low-risk way for investors to meet long-dated liabilities.
Alex Campbell, abrdn’s investment director, said: “Liability-matching assets that preserve a real rate of return, provide some shelter from public market volatility and have robust credit quality in times of economic downturns are in short supply.
“We are excited to launch the abrdn ILID which seeks to address these challenges by combining inflation protection with access to high-quality assets that can improve the UK’s national infrastructure.
“There is increasing demand from investors to allocate capital to assets such as wind or solar projects as we collectively work towards net-zero targets, and infrastructure offers some exciting investment opportunities.”
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