UK LGPS pension funds urged to allocate £16bn to local ‘place-based’ investments - The Good Economy, the Impact Investing Institute and Pensions for Purpose

This article by IPE Real Assets looks at the recent research project on how to mobilise local government pension scheme (LGPS) and wider pension fund investment in place-based sectors across the UK.

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The UK’s Local Government Pension Schemes (LGPS) should re-allocate £16bn (€18.5bn) of capital to local 'place-based' investments, including housing, clean energy, infrastructure and regeneration.

The white paper, Scaling Up Institutional Investment For Place-Based Impact, has been published by the Place-Based Impact Investing Project, launched by impact-investment organisations The Good Economy, the Impact Investing Institute and Pensions for Purpose.

Co-authored by former Legal & General Capital CEO Paul Stanworth, the report focuses on the potential role of the UK’s £326bn LGPS sector, but also argues that the conclusions are relevant to institutional investors more broadly.

The report found that LGPS already have exposure to what could be categorised as place-based investments, but this was limited to about one per cent of portfolios – despite their potential to generate 'stable, risk-adjusted returns' while supporting 'local and regional economic development' and creating positive social impact.

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