Nest seeds first major investment with strategic partner IFM Investors

• Nest seeds a new infrastructure debt fund with a €530 million (approximately £450 million) investment, focusing on the European market. 
• This is Nest’s first investment in an IFM fund since becoming a strategic partner earlier this year, which saw Nest become IFM’s first international owner. 
• The launch of the fund will further amplify investments into private markets, including in the UK.

The UK’s largest pension scheme by number of members, Nest, has committed €530 million (approximately £450 million) to seed a new infrastructure debt fund — its first major move since becoming an owner of global investment manager IFM Investors.

The landmark partnership was finalised this month, making Nest the first international owner of IFM, joining 15 Australian superannuation funds. As part of the partnership, Nest and IFM have committed to co-creating investment strategies with a keen focus on private market opportunities across the UK and Europe.

The launch of the infrastructure debt fund will further amplify investments into private markets, including assets in the UK such as UK fibre, wind, waste to energy, bus, or rail infrastructure.

The move supports IFM’s global expansion into new investment opportunities and markets, while also supporting Nest’s ambition to diversify and increase its allocation to private markets from 17% to 30% of assets under management by 2030.

The infrastructure debt fund aims to deliver attractive relative value in sub-investment grade infrastructure, with the aim to enhance risk-adjusted returns for Nest’s over 13 million UK members. 

Nest intends to invest £5 billion in private markets through IFM by 2030. This is the first IFM fund in the partnership, which will help Nest in achieving that ambition.

Nest’s commitment to this new fund aligns with its signing of the Mansion House Accord earlier this month. The Accord sees 17 of the largest workplace pension providers in the UK express their intention to invest at least 10% of their defined contribution (DC) default funds in private markets by 2030, with 5% of the total allocated to the UK.

Minister for Pensions Torsten Bell said:

“I welcome the steps Nest, and the wider pensions industry, are taking to invest in more productive assets, from growing companies to infrastructure.

“This demonstrates the real appetite behind pension funds signing up to the Mansion House Accord and the positive outlook on the UK private markets.

“Working together, government and industry will deliver the investment to drive future prosperity, supporting better outcomes for savers and faster growth for Britain.”

Commenting on the investment, Liz Fernando, Chief Investment Officer at Nest said:

“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. 

“We know the importance of investing in the UK, and that’s why we have signed up to initiatives like the Mansion House Accord. This new IFM fund further shows our commitment to supporting the UK economy and gives a significant boost to our ambition to almost double our assets under management (AUM) into private markets to 30% by 2030. 

“We’re pleased to have taken this exciting first step with IFM, one of the world’s leading global infrastructure investment managers. We came together to develop sophisticated investment strategies like this one, and we look forward to co-creating more opportunities on behalf of our members.”  

David Cooper, Head of Debt Investments in EMEA of IFM Investors, said:

“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. 

“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.”