Pension plans add £117m to LGP fund

Michelin Pension Plan and two other corporate pension schemes have committed £117m to Legal & General Property’s Limited Price Inflation Income Property Fund.

LGP launched the open-ended fund for defined benefit pension schemes last year. The latest investments take total commitments to nearly £180m, from eight investors.

The fund matches pension fund liabilities by investing in buildings let to mainly government tenants with income streams over 20 years, providing annual inflation-linked uplifts.

LGP business development manager Pete Gladwell said: “Pension funds want to reduce volatility and seem interested in targeting liability-matching investments more precisely. It will be a good year for the fund if the team keeps finding assets.”

The fund’s £80m investments  include offices in Newport and Swansea let to the Welsh Ministers on 25-year leases, from 2008 and 2009, with annual inflation-linked uplifts.