Gresham House has secured 拢100m in commitments from two UK local authority pension funds for the first close of its 拢500m (鈧�587m) British Sustainable Infrastructure Fund II (BSIF) strategy.
The commitments came from Worcestershire Pension Fund and Teesside Pension Fund, who are one of six UK local government pension scheme limited partners (LPs) in BSIF I.
BSIF reached its fundraise capacity of 拢300m last year, including one UK treasury, and the first close of BSIF II was exclusively reserved for existing LPs.
Gresham House said it planned to pursue subsequent closes with remaining existing LPs alongside a wider group of UK and overseas LPs later this year and early next year.
The asset manager said the investment platforms of the first BSIF strategy 鈥渘ow provide BSIF II with well over 拢1.3bn of identified sustainable infrastructure pipeline鈥�.
鈥淏SIF II will for the first time have the potential to follow its investments outside of the UK to support their strategic global growth,鈥� it added.
The closed-ended strategy has a 12-year time horizon and targets an annual net return of 8-10%, including a target income yield of 5% per annum. It focuses on six sub-sectors: resource efficiency; digital inclusion; waste solutions; regeneration; decarbonisation; and health and education.
Heather Fleming, managing director of institutional business at Gresham House, said BSIF II鈥檚 focus on the less competed sub-拢50m part of the market 鈥減rovides differentiation coupled with our ability to offer LPs co-investment opportunities in their areas of specific interest鈥�.
Councillor David Coupe, chair of the Teesside Pension Fund, said the pension fund viewed the allocation as complementary to its core infrastructure exposure and was 鈥減leased to be offered the flexibility to co-invest in locally-based opportunities as they arise鈥�.
Elizabeth Eyre, chair of the Worcestershire Pension Fund committee, said: 鈥淔ollowing our previous investment, this latest commitment to BSIF II adds to our alternatives exposure at a time when securing diversified income streams is increasingly important.
鈥淲e recognise the importance of a strategy that also aligns with our environmental, social and governance values.鈥�
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