LPFA’s “Investing in the UK” report sets out infrastructure and real estate investments

The London Pensions Fund Authority (LPFA), a £7.7 billion Local Government Pension Scheme (LGPS) Fund, has published their first “Investing in the UK” report, in collaboration with The Good Economy and Local Pensions Partnership Investments. With the Government’s Levelling Up Agenda in mind, the report maps out the location and details of the Fund’s UK Real Estate and Infrastructure Investments.

Amongst other things the report highlights that the LPFA is invested in an offshore windfarm powering over 1 million homes, in 163 schools catering for around 141,000 students, 41 health care facilities with over 14,000 beds, 114 commercial real estate properties providing an estimated 19,000 jobs and 24 housing projects including build-to-rent, student and affordable housing.

CEO of the LPFA, Robert Branagh, said: “This report shows the impact that our Fund has on communities and places across the UK through our investment in physical assets: Infrastructure and Real Estate. Understanding where our physical investments are is good risk management, particularly as the impact of climate change becomes more pronounced. We also support the Just Transition and we recognise the Government’s interest in Levelling Up. We know that it is important that we move to a low carbon economy and that this is done in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no-one behind.

Pension Funds have a role to play in contributing to sustainable development, in enhancing local economic resilience in London where we are based and across the UK, in supporting business growth and job creation and improving transport and other types of infrastructure. However, it’s important that we understand what is already taking place so that we can make informed decisions about the future.”

In total, Real Estate and Infrastructure make up 9.5% (Real Estate) and 12.2% (Infrastructure) of the LPFA’s £7.7 billion Fund, or around £1.7 billion. The project focuses on UK-based investments only which make up around 64% of the LPFA’s total Infrastructure and Real Estate investments. This is about £1 billion in value. Real Estate includes residential and commercial property and Infrastructure includes anything from ports and trains to wind and solar farms.

As well as investing in projects across the UK, the LPFA is also committed to supporting London’s future including through its investments in the London Fund, a collaboration between LPPI and LCIV. The London Fund is investing in a range of diverse projects in the capital including the regeneration of Shepherd’s Bush Market, the redevelopment of the Saville Theatre, Virtus Data Centres and Edge, the net zero development in London Bridge.

According to Alistair Peck, Head of Communications and Engagement at the LPFA, “This is a multi-year collaboration project with The Good Economy and LPPI and this report represents only one step in how we will be communicating our findings. We will be launching an interactive map on our website where our stakeholders can see how we are investing across the UK and see how they are supporting the UK’s development.

Our members want to know how their pension is invested and we support their desire for transparency. In 2022, we linked up with Tumelo to launch our Transparency dashboard on our website which shows what Listed Equity investments we have. This is around 50% of our total Fund. When the results of this project are online, our members and stakeholders will be able to see where over 70% of our Fund is invested.”

The Fund has recently launched their Net Zero Progress Report which summarised the progress that the Fund had made in their net zero journey. In February 2024, the Fund also published their new Responsible Investment Policy which ensured that environmental, social and governance considerations are fully embedded in investment decision-making and stewardship. The policy also reaffirmed the Fund’s commitment to collaborating with other like-minded organisations to drive change. In 2023, the LPFA announced its support for the CDP’s Science-based targets campaign and ShareAction’s Oil and Gas Bank financing campaign.