Nest drops $930m into new IFM Investors fund

After taking a 10% stake in the investment giant, UK pension fund Nest will seed a new infrastructure debt fund from IFM Investors.

Last month, Nest officially became IFM Investors' first international owner, now sitting alongside the existing 15 industry super fund owners.

Now, in its first move as an owner, Nest is handing over $930 million (€530m) to IFM Investors for an infrastructure debt fund that will invest in opportunities in the European market, including the UK.

It's expected the first investment via the new fund will be made in the coming months.

"IFM exists to invest, protect, and grow the long-term retirement savings of working people, and we're proud to support Nest in unlocking the income and risk-adjusted return potential of infrastructure debt for its 13 million members," IFM Investors head of debt investments, EMEA David Cooper said.

"Investing in infrastructure is critical to powering the digital economy, cutting carbon emissions, and driving the energy transition. Private debt capital is a key enabler-offering strong relative value for investors and, most importantly, their members.

"By partnering with organisations like Nest, IFM is working to deliver better retirement incomes for workers across the UK."

Meantime, Nest chief investment officer Liz Fernando said the pension fund is excited to be taking this first step with IFM, saying they came together to develop sophisticated strategies like this one.

"Our members' interests are at the heart of Nest's investment strategy. Seeding this global infrastructure debt fund provides our members with access to diversified, world-class investment opportunities, and investments back in their communities and the infrastructure they use," she said.

"This new IFM fund further shows our commitment to supporting the UK economy... and we look forward to co-creating more opportunities on behalf of our members."

The investment aligns with Nest's plans to boost its private markets portfolio in line with the UK's Mansion House Accord, which it signed earlier this month. The Accord is a commitment to invest at least 10% of defined contribution assets in private markets by 2030, with 5% of the total allocated to the UK.

Currently, Nest has about 15% of its assets in private markets and wants to grow this to 30%. About 60% of the existing allocation is invested in the UK.