Sustainable City-Building ‘London Fund’ Emerges After Brexit Dust Settles

Three pensions pool their capital to invest in residential property/affordable housing, regeneration, digital infrastructure, and clean energy. 

Three London-centric pension organizations pooled their capital to back the formation and strategy of “The London Fund,” a new investment vehicle focused on improving the quality of life for London communities.

Local Pensions Partnership (LPP), London Collective Investment Vehicle (LCIV), and the London Pensions Fund Authority (LFPA), whom together have a combined assets under management valuation of nearly £57 billion ($74.3 billion), said the potential pipeline of investments would include residential property and affordable housing, community regeneration projects and infrastructure, and clean energy. 

“Each of these assets will be selected to provide sustainable, long-term, and risk-adjusted value to the pension scheme members, while creating a ‘double bottom line’ by making a positive contribution to social and environmental issues in the area,” the Local Pensions Partnership said in a statement.

The primary motive behind the funds’ collaboration on the London Fund is the expectation for an increased amount of investment opportunities as a result of the fund’s relatively large scale, rather than if the pension organizations had been working alone. The pensions said they expect to target an allocation of several hundred million pounds, across a spectrum whose scope was widened as the pension funds merged their resources. 

London’s population is expected to surge at a rate faster than any other UK city, subsequently placing pressure on the development of residential housing and infrastructure. “The London Fund is being specially created and designed to address these challenges in a long-term sustainable way,” the LPP said. 

London Mayor Sadiq Khan recently released a report and toolkit with New York City Mayor Bill DeBlasio to help guide other municipalities encourage public opinion against fossil fuel divestments, and a framework on how to divest from high carbon-emitting companies. 

A study by Willis Towers Watson’s Thinking Ahead Institute argued for sustainable-friendly behaviors from large scale institutions like those backing The London Fund. The institute claims large asset owners have an inherent moral and social responsibility to push forward with sustainable-friendly investment strategies. 

The United Kingdom finalized its departure from the European Union on January 31. . “We are delighted to be able to develop a project that will provide attractive returns for our members while helping us support communities in London,” said a spokesman for The London Fund.

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