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$37bn UK pension manager invests in infra secondaries

Brunel Pension Partnership has set up a £150m customised account with StepStone to make primary, secondaries and co-investments.

Brunel Pension Partnership has upped its exposure to infrastructure with the launch of a customised account.

The £30 billion ($37 billion; €33.3 billion) manager, which invests on behalf of 10 UK public pension funds, has appointed StepStone Infrastructure and Real Assets to set up discretionary vehicle named Cycle 2 to make primary, secondaries and co-investments in infrastructure, head of private markets Richard Fanshawe wrote on the pension’s website.

The vehicle is £150 million in size, a spokesman for Brunel told sister publication Infrastructure Investor.

StepStone was picked because of its “sharp focus on sustainability… far superior to other market solutions, which offer only a very standardised ESG approach,” Fanshawe noted.

This is the second such account that StepStone has formed for Brunel. The 2018-vintage Cycle 1 can invest up to 40 percent in co-investments and secondaries on a global basis, with a bias towards the UK and Europe. At least 35 percent of the vehicle will be invested in renewables.

“Infrastructure investments, with their more defensive qualities and combination of capital and income, are an important part of any pensions portfolio, especially so in a year like 2020,” Fanshawe said.

Brunel Pension Partnership was formed as part of the plan to merge 89 local government pension schemes into eight regional schemes in order to improve transparency and reduce costs. It encompasses the local pension schemes of Buckinghamshire, Oxfordshire and six counties in the west of England.

Brunel has also invested in private equity secondaries, committing £11.5 million to Capital Dynamics Secondaries V, a  2018-vintage vehicle that has yet to hold final close, according to Secondaries Investor data.