Australian manager plans to buy £10bn of UK assets
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IFM Investors, a global institutional investment manager owned by Australian superannuation funds, has signed a memorandum of understanding with the Department for Business and Trade, pledging to invest £10bn in the UK by 2027. The government has announced a total of £29.5bn of commitments by global investors.
The MoU was signed at the Global Investment Summit 2023 in London on Monday between IFM Investors and the minister for investment, Lord Johnson, at Hampton Court Palace.
Partnerships between governments and long-term investors “are necessary to unlock the potential of pension funds to invest to help mitigate system-level risks such as climate change”, said IFM chief executive David Neal.
Head of infrastructure Europe, Deepa Bharadwaj, added: “The UK is taking steps to help facilitate long-term investment in infrastructure and we currently see significant deployment opportunities, particularly as part of the UK energy transition in areas such as offshore wind, solar, battery storage, renewable fuels and pumped hydro.”
The government has announced a total of £29.5bn of investment commitments by global investors at the summit.
Prime Minister Rishi Sunak said: “With new funding pouring into key industries like clean energy, life sciences and advanced technology, inward investment is creating high-quality new jobs and driving growth right across the country.”
Spanish utility firm Iberdrola has confirmed £7bn of investment as part of a £12bn programme for 2024-28, and North Star, owned by Partners Group, has committed £500m to offshore wind infrastructure, according to the government.
The MoU with IFM reflects the appetite of the manager and Australian superannuation funds to invest in the UK market, according to the manager. Australian supers handle about £1.8tn, which is expected to grow to roughly £4.7tn by 2040, requiring funds to allocate more capital.
The manager cited Nala Renewables as an example of how the MoU would support UK investment. Nala, a portfolio company of IFM, is a renewable energy business headquartered in the UK.
IFM said Nala “is actively seeking investment opportunities in the UK as it looks to achieve a renewable capacity target of 4GW by 2025”.
IFM opened an office in London in 2006 and has invested in UK toll roads, utilities and airports, as well as building a portfolio of loans to UK-based infrastructure and energy transition businesses and projects. It said the MoU is an increase on its 2022 commitment to invest £3bn in its UK-based infrastructure portfolio assets.
Labour is also making efforts to woo business and attract inward investment, as leader Keir Starmer and shadow chancellor Rachel Reeves met with more than35 business leaders and investors on Monday morning, including major energy firms, banks and asset managers including Macquarie Asset Management, JP Morgan Asset Management, M&G, Goldman Sachs and HG Capital.
What is your view on investing in UK infrastructure assets?