UK defined contribution pension scheme NEST will take a 10 per cent ownership stake in IFM Investors parent company Industry Super Holdings and commit to significant ongoing investment in the asset manager.
A media release from IFM said NEST (the National Employment Savings Trust) will join IFM’s existing 16 Australian industry super fund owners, becoming the only non-Australian shareholder in IFM’s 30-year history.
NEST manages retirement savings of over £48 billion ($95.8 billion) on behalf of over a third of UK workers.
IFM’s existing owners manage retirement savings of over $1 trillion on behalf of over half the Australian workforce.
The agreement with NEST is expected to support IFM’s growth and diversification strategy, with NEST:
- Making foundation investments to launch three new IFM private market strategies in infrastructure equity, infrastructure debt and private equity over the next 12-18 months; and
- Providing presumptive foundation support on an ongoing basis for new IFM strategies over the years and decades to come and considering IFM as a preferred investment service provider for private market investments.
NEST’s ambition is to invest around £5 billion via IFM managed investments by 2030, across real assets and private markets as well as co-design new investment opportunities in infrastructure and private equity.
Since 2019, NEST has been increasing its exposure to private market assets to help its members improve their retirement outcomes and is stepping up plans to increase its private markets allocation from 17 to 30 per cent.
NEST intend to work with IFM to develop new investment strategies to invest in IFM’s infrastructure, debt, and private equity capabilities – with a key focus on new UK investment opportunities. Nest members will also benefit from IFM’s existing deal sourcing and operational capabilities in the UK.
IFM will provide NEST with investment capabilities and expertise across a range of private market investments, as it has with Australian industry super fund owners for the last three decades.
IFM and the UK Government have a Memorandum of Understanding targeting £10 billion pounds of investment by IFM in the UK by 2027.
IFM launched a UK energy blueprint with NEST, and other UK pension and Australian super funds recommending targeted policy action to unlock pension capital to contribute to the new UK Government delivering on its clean power by 2030 mission.
The completion of the transaction is subject to certain conditions, including regulatory and shareholder approvals, which NEST and IFM anticipate being satisfied before the middle of 2025.