Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Nest buys into IFM to fulfill private market ambitions
The circa A$100 billion UK pension scheme Nest will take a 10 per cent stake in IFM Investors and “commit to significant ongoing investment” as it looks to increase its private market allocations from 17 to 30 per cent.
Nest, the UK’s largest pension scheme by members, will join 16 existing industry super fund owners and become the first non-Australian shareholder of IFM Investors in its 30-year history.
“IFM is owned by some of the fastest growing pension and super funds in the world, who recognise the advantages to members when they invest in private markets through a collectively-owned manager,” said IFM Investors CEO David Neal.
“This alliance will support IFM’s further expansion into new investment opportunities and markets across the world, especially in the UK, and give Australian workers greater access to global markets that have the potential to deliver risk-adjusted returns for their retirement.”
The agreement with Nest is central to IFM’s growth and diversification strategy, with the pension fund making foundation investments in three new strategies across infrastructure equity, infrastructure debt and private equity in the next 12-18 months, as well as “presumptive foundation support” on an ongoing basis. Nest wants to have about A$10 billion with IFM managed investments by 2030.
“Nest is proud to be recognised as an international player within the global pensions industry,” said Mark Fawcett, CEO of Nest Invest. “By joining forces with IFM, one of the world’s leading infrastructure managers, we are taking a crucial step towards our goal of investing 30 per cent of our assets under management into private markets by 2030. We’re excited to leverage IFM’s expertise and scale to unlock more private market opportunities that can drive stronger returns for our members.”
IFM and the UK government already have a memorandum of understanding targeting circa A$20 billion of investment into the UK by 2027. Alongside existing shareholders, Nest also partnered with IFM to launch IFM’s energy blueprint recommending targeted policy action to unlock pension capital for investment in the UK government’s energy transition plans.
