UK’s NEST Acquires Minor Stake in IFM Investors

London-based National Employment Savings Trust (NEST), the largest UK pension scheme by members, has announced acquiring 10% stake in Industry Super Holdings, a holding company of global pension capital investor IFM Investors (IFM) in Australia.

With this, NEST became the first overseas owner in IFM’s history, and has joined the existing 16 Australian superannuation funds who, collectively, ultimately own IFM. The agreement is to support NEST’s ambition to diversify and increase its allocations to private market assets from 17% to 30% in the coming years.

Together, NEST and IFM expect to capitalise on significant UK private market investments and unlock new investment opportunities across the globe. NEST’s ambition is to invest around $6.26 billion through IFM by 2030.

Together, NEST and IFM will develop sophisticated investment strategies that will enable the Trust to pursue new private market investments that have the potential to provide greater returns to its more than 13 million UK members. IFM will also provide NEST with market-leading investment capabilities and expertise across a range of private market investments.   

NEST intends to invest in IFM’s infrastructure, debt, and private equity capabilities – with a key focus on new UK investment opportunities.

This includes looking to invest in real assets across the UK, building upon the existing UK assets held within IFM funds, including Arqiva, a British telecoms company, the M6 toll road, in addition to Manchester, Stansted, and East Midlands Airports.

This is a significant milestone in IFM’s growth trajectory – and this new relationship will allow IFM to draw upon NEST’s insights and expertise as one of the UK’s largest pension funds. IFM’s existing owners manage retirement savings of over $725.85 billion, making IFM’s ownership structure distinctly different to those around the world.

Key Step                                    

NEST Invest CEO Mark Fawcett said that by joining forces with IFM, one of the world’s leading infrastructure managers, they were taking a crucial step towards our goal of investing 30% of company’s assets under management (AUM) into private markets by 2030.

“With $12.51 billion of our AUM already invested in the UK, our goal is to grow this to $25.03 billion, and our partnership with IFM will be instrumental in helping us get there,” Fawcett added.

IFM Investors Chief Executive David Neal said that 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.

He added: “NEST will support IFM’s further expansion into new investment opportunities and markets across the globe, bringing UK expertise into IFM’s ownership group, as we seek to give pension fund members greater access to global markets that have the potential to deliver risk-adjusted returns for their retirement.” 

NEST’s Chair Brendan McCafferty said that they believed that no investment opportunity should be out of reach for everyday pension savers.

“Our new partnership with IFM demonstrates our ongoing commitment to using every tool in our toolbox to boost members’ risk-adjusted returns. Together with IFM, we will be able to further enhance our sophisticated investment options for everyday UK pension savers, aiming to help them build a more secure retirement,” he added.

IFM Investors Chair Cath Bowtell said that this new partnership reflects the scale of the Australian super system and further demonstrates the influence it commands around the world.