abrdn has launched the Inflation-Linked Infrastructure Debt Fund (ILID, “the fund”), an evergreen, UK-focused strategy for institutional investors. ILID aims to provide inflation protection combined with credit and illiquidity premia, allowing a capital-efficient, low risk way for investors to meet long-dated liabilities.
Working closely with LGPS Central Limited in its design, the fund focusses on high quality investment grade infrastructure debt whilst also capturing additional illiquidity premium.
ILID made its first close with commitments of £220m from Local Government Pension schemes in the UK. The fund draws on the combined strengths of abrdn’s Fixed Income platform and a wide-ranging £11bn Private Credit business that provides tailored solutions to clients’ long-term requirements.
The fund will invest in a broad range of inflation-linked private infrastructure debt in the UK with a limited allocation to European assets. Target sectors include clean energy generation, storage and distribution, transport and social infrastructure. ILID will be managed by Alex Campbell and Jeremy Allcock from abrdn’s Infrastructure Debt team.
Alex Campbell, Investment Director, abrdn, said: “Institutional investors face challenges not seen in over a generation. Liability matching assets that preserve a real rate of return, provide some shelter from public market volatility and have robust credit quality in times of economic downturns are in short supply. We are excited to launch the abrdn Inflation-Linked Infrastructure Debt Fund which seeks to address these challenges by combining inflation protection with access to high quality assets that can improve the UK’s national infrastructure.
“There is increasing demand from investors to allocate capital to assets such as wind or solar projects as we collectively work towards Net Zero targets and infrastructure offers some exciting investment opportunities.
“We were delighted to work in partnership with LGPS Central. Their involvement from day one ensures the fund really delivers a way to meet local pension schemes’ investment goals. The launch of this new fund also underpins a strategic priority for abrdn to grow our core capabilities in real assets.”
Mike Gillespie, Investment Director, Private Markets for LGPS Central Limited, added: “This is a strategic cornerstone investment, a first for our Stable Return private debt sleeve. It was really important to make sure that the design was not only a good strategic fit for us, but also marketable to other potential investors. We welcomed the highly collaborative mindset taken by the abrdn team, and the multi-disciplined approach across its platform which has undoubtedly resulted in a highly compelling proposition. Our view is that there is strong demand and supply drivers for a fund of this nature, and we look forward to a long and successful relationship with abrdn.”
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