abrdn works with LGPS Central on launch of inflation linked UK infra debt fund

abrdn has launched the Inflation Linked Infrastructure Debt Fund, an evergreen, UK focused strategy for institutional investors.

The fund aims to provide inflation protection with credit and illiquidity premia to provide investors with a capital efficient, low risk way to meet their long-term liabilities.

LGPS Central was a cornerstone investor and assisted in the fund’s design. The fund will focus on high quality investment grade infrastructure debt while capturing additional illiquidity premium.

It will invest in a broad range of inflation-linked private infrastructure debt in the UK with a limited allocation to European assets.

Target sectors include clean energy generation, storage and distribution, transport and social infrastructure.

Alex Campbell, investment director, abrdn, said: “Institutional investors face challenges not seen in over a generation. 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.

“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.”

The fund made its first close with commitments of £220 million from local government pension schemes in the UK.