London: IFM Investors, the Australian super funds-owned infrastructure specialist, will pour almost $20 billion into Britain over the next four years.
One of the world’s largest pension fund managers, the Melbourne-based group has been an investor in British infrastructure for nearly two decades, owning or holding stakes in a £5 billion ($9.57 billion) portfolio of British assets, including Manchester and Stansted airports, Anglian Water and the M6 toll road.
IFM Investors CEO David Neal.Credit: Rhett Wyman
British Prime Minister Rishi Sunak will announce the partnership on Monday as part of £29.5 billion of new investment, as the world’s A-list CEOs and investors arrive at a Global Investment Summit at Hampton Court Palace in south-west London.
IFM, which has about $217 billion in assets, will sign an agreement with the UK’s Department for Business and Trade to identify commercially viable opportunities. Potential projects include Nala Renewables, a UK-based portfolio company, which is actively seeking investment opportunities as it looks to achieve a renewable capacity target of four gigawatts by 2025.
The group previously said it had cooled on making further significant investments in new UK infrastructure due to the high levels of uncertainty caused by Conservative government dysfunction and inefficient planning processes. Britain has also faced stiff competition from a turbocharged American market, where subsidies for infrastructure investment as a result of the Inflation Reduction Act have helped make it an attractive destination for investors.
IFM Investors chief executive David Neal said the agreement reflected the appetite of Australian super funds to again invest in the UK market. The Australian pension system is worth about $3.5 trillion and expected to grow to about $9 trillion by 2040.
Neal said that more capital would increasingly need to be deployed in aligned economies such as the UK, with the agreement to provide greater understanding of policy priorities.
“Our presence in the UK continues to grow, and we look forward to working closely with the government to drive investment into large-scale infrastructure and energy transition projects across equity and debt funding,” Neal said. “Partnerships between governments and long-term investors are necessary to unlock the potential of pension funds to invest in system-level risks such as climate change.”
IFM Investors, which is owned by 19 Australian industry-wide pension funds, opened an office in London in 2006 and continues to grow its presence in the UK, including through infrastructure equity and debt, such as investments in major toll roads, utilities and airports, and extensive portfolio of loans to UK-based infrastructure and energy transition businesses and projects.
