Nest to acquire ten percent ownership stake in IFM investors to boost UK private market investments

• Nest will become a 10% shareholder in IFM’s holding company – Industry Super Holdings.
• Nest and IFM will invest in IFM’s infrastructure, debt, and private equity capabilities – with a key focus on new UK investment opportunities that have the potential to provide greater returns to its more than 13 million UK members.
• This strategic partnership will support Nest’s ambition to diversify and increase its allocations to private market assets to 30%.

Nest, the largest UK pension scheme by members, has today announced a landmark partnership with global pension capital investor IFM Investors (IFM) that will see Nest become the first overseas owner in IFM’s history.

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 £5 billion through IFM by 2030.

Nest will become a 10% shareholder in IFM’s holding company – Industry Super Holdings – joining the existing 16 Australian superannuation funds who, collectively, ultimately own IFM.

This agreement is set 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 will develop sophisticated investment strategies that will enable Nest 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 GBP £580 billion (A $1trillion), making IFM’s ownership structure distinctly different to those around the world.

This landmark announcement marks the connecting of two purpose-driven organisations with a shared mission to invest, protect and grow the long-term retirement savings of working people.

Commenting on the announcement, Mark Fawcett, CEO of Nest Invest, said:

“Nest is proud to be recognised as an international player within the global pensions industry. By joining forces with IFM, one of the world’s leading infrastructure managers, we are taking a crucial step towards our goal of investing 30% of our assets under management (AUM) into private markets by 2030.

“We’re excited to leverage IFM's expertise and scale to unlock more private market opportunities that can drive stronger and more impactful returns for our members.

“With £10 billion of our AUM already invested in the UK, our goal is to grow this to £20 billion, and our partnership with IFM will be instrumental in helping us get there.”

Commenting on the announcement, David Neal, IFM Investors CEO, said:

“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.

“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.”

Commenting on the announcement, Brendan McCafferty, Nest’s Chair, said:

“At Nest, we believe 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 our members’ risk-adjusted returns. Together with IFM, we’ll be able to further enhance our sophisticated investment options for everyday UK pension savers, aiming to help them build a more secure retirement.

“With more than a third of the UK workforce saving with Nest, access to more private investment opportunities will allow us to increase investment into our members' jobs, communities, and essential infrastructure, like roads and bridges.”

Commenting on the announcement, Cath Bowtell, IFM Investors Chair, said:

“This new partnership with Nest reflects the scale of the Australian super system and further demonstrates the influence it commands around the world. This is a historical milestone in IFM’s history and has come about because of IFM and Nest’s shared purpose – to invest, protect and grow the long-term retirement savings of working people.”