The Pensions Infrastructure Platform has launched its first solar photovoltaics fund with Aviva Investors as the fund manager.

The fund aims to deliver predictable, long-term inflation-linked cash flows through investing in small-scale solar PV installations in the UK. The return objective is materially to outperform inflation-linked government bonds, with the fund expected to generate quarterly income for pension fund investors.

PiP chief executive Mike Weston said the launch of a second fund within a year is an important addition to the PiP. He said that the fund broadens the investment opportunities on offer, and on market-leading terms of 50bps with no performance-related element it will deliver real value to pension schemes.

“PiP remains committed to making infrastructure work for pension funds of all sizes, offering investors a low-risk, long-term investment that provides inflation-linked cash flows. We are particularly pleased to be working with Aviva Investors to launch this fund and to be able to put their expertise in this area to work for pension schemes,” he stated.

Aviva Investors head of infrastructure Ian Berry said they believe the new fund will enable an increasing number of UK pension funds to benefit from this expertise.

“Our investment proposition in infrastructure responds to our clients’ need for outcome-oriented solutions, offering a secure income alternative that can provide attractive risk-adjusted returns in projects that are unleveraged, long-term and inflation-linked – all of which underpin this new fund,” he said.

Pension Protection Fund senior portfolio manager Alan Goodman said it became a founding investor of the PiP because they saw the need for a platform to provide pension schemes with access to the important asset of infrastructure in an affordable and suitable way.

“Today’s announcement marks the continued and successful growth of the PiP and we remain committed to this project,” he added.

The fund will have a hard cap of £250m and first close of the fund is expected in Q2 2015. Returns of the fund are expected to be in line with the key feature of the PiP, at RPI+2-5 per cent.

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