Local council pension funds from London and Lancashire are pooling 拢1.2bn (鈧�1.44bn) of real estate.
The pension funds鈥� existing core property allocations are being combined through the.
Knight Frank Investment Management (KFIM) will source and manage investments for 拢850m of LPP capital.
The London Pension Fund Authority (LPFA) and Lancashire County Pensions Fund (LCPF) will respectively hold 拢300m and 拢550m in the pool.
The KFIM mandate will be combined with an existing allocation of 拢260m for specialist income and value-add strategies, including London student housing and residential developments, which includes a loan to .
For KFIM, the mandate almost doubles its assets under management to 拢1.75bn.
John Styles, the firm鈥檚 head of fund management, said KFIM will partner with developers and managers to access specialist sectors and value add opportunities for the fund.
As , the UK government has said pooling must be used for new allocations. Some schemes may choose to pool their existing direct property holdings. A survey by investment consultancy Hymans Robertson of 41 local government pension scheme funds found that just over half of property assets on aggregate were held through direct mandates.
The LPFA and LCPF have worked together since early last year, and LPFA has also launched a with the Greater Manchester Pension Fund (GMPF).
As the LPP is expected to a 拢25bn asset target set by the UK government, the two funds are , who are all expected to invest in the infrastructure joint venture.
As , the Berkshire Pension Fund is also set to join the LPP.
