Nest mandates IFM Investors for climate credit strategy

The UK National Employment Savings Trust (Nest) has mandated IFM Investors with £200 million ($382m) for its growth credit strategy to invest in next-generation climate technologies.

Through this mandate, Nest said it will support innovative projects and companies well positioned to benefit from the transition to a lower-carbon economy.

It is designed to support growth-stage industrial and infrastructure-oriented businesses requiring scale-up, having demonstrated a commercial need that have progressed beyond early-stage risk but remain underserved by traditional infrastructure debt, it said.

"The globally focussed strategy aims to back companies, asset-backed debt, across power and energy, sustainable transportation, digital circular economy and industrial innovation sectors, backing innovators that deliver measurable, low-carbon outcomes across the real economy," Nest Invest director of public and private markets Rachel Farrell said.

Farrell added the investment is also putting members' money to work in ways that move the dial on climate actions, making it a clear "win-win" for both members and the wider market.

IFM global head of debt investments Rich Randall said the mandate expands the fund's focus to innovative infrastructure and industrial technologies that support economic resilience, energy security and supply chain strength.

"As a pension fund owned institution, IFM is focused on delivering strong long-term outcomes for working people's retirement savings through investments with resilience, durability and lasting value," Randall said.

"Through this partnership, we aim to provide flexible growth capital to high quality businesses helping drive the transformation of critical infrastructure systems, while delivering attractive risk adjusted returns for investors."

Nest became the first international owner of IFM last year by taking a 10% stake and joining the other 15 Australian superannuation funds.

As part of the strategic partnership, Nest plans to invest in IFM's infrastructure, debt and private equity strategies and increase its allocation to private markets to 30.

Last year, Nest committed close to £500 million ($930m) to seed a global infrastructure debt fund managed by IFM, which has now completed its first two investments - both located in the UK.

The investments include $82.6 million (£40m) to support the rollout of rural fibre broadband infrastructure across Scotland and the North of England, and a further $93 million (£45m) backing an energy-from-waste and decarbonisation business in the Midlands and North of England.

Nest intends to invest £5 billion ($9.5bn) through IFM by 2030.