UK-based pension provider firm TPT will be investing in social housing and green infrastructure among other areas via its defined contribution master trust
Pensions provider TPT Retirement Solutions has announced it plans to invest around £75m (€89m) in an impact investment strategy over coming years via its defined contribution (DC) master trust default fund.
Adviser for the strategy will be AllianceBernstein (AB), which already advises on investments made as part of TPT’s wider DC default investment strategy.
TPT said that, in the longer term, it plans to allocate more of the pensions of its DC default investment strategy members to investments aimed at producing positive societal impacts and tackling global social and environmental problems.
The new strategy will target investments in sectors including social housing, green infrastructure, and renewable energy, adding 10-20 investment tranches over time to finance impact projects.
Philip Smith, TPT’s director of defined contribution, told Impact Investor that AllianceBernstein would manage TPT’s impact investment strategy in accordance with its investment beliefs on strong governance and responsible investment as a catalyst for positive change, informed by the UN sustainable development goals (SDGs).
“We definitely would not classify ourselves as an impact investor, but we see impact as having very attractive investment characteristics. What drives us really is making sure that we get good return for our investments, but that we do it in a responsible way,” he said.
David Hutchins, AB’s lead portfolio manager multi-asset solutions EMEA, said the strategy followed a more precise definition of impact than just investing in stocks viewed as green.
AB is handling TPT’s £75m investment as part of its wider £200m strategy to invest in new high impact projects. Hutchins said AB had made three investments as part of this strategy so far, covering renewable energy infrastructure and wider infrastructure in Europe, and digital communications in eastern Europe. On the radar for the future are investments in the UK care sector, sustainable farming and life sciences among others.
“Our definition of impact is relatively strict at AB in that it generally means new money going into new projects or enhancing those projects,” Hutchins told Impact Investor.
TPT, based in Leeds, northern England, manages over £14.1bn of assets (as of end-September 2021) for a total of 400,000 member pension holders. In 2021, TPT pledged to reach net zero emissions for its portfolio by 2050 or sooner, having signed up to the Paris Aligned Investment Initiative, which is designed to help investors align their portfolios and activities with goals of the Paris climate change agreement. TPT also said it was targeting a 50% reduction in emissions by 2030 from its baseline position.