The UK's Nest is to acquire a 10 per cent stake in IFM Investors’ (IFM) holding company, Industry Super Holdings, with the aim of boosting UK private market investments.

Nest will be the first overseas owner in IFM’s history and join the 16 Australian superannuation funds that collectively own IFM.

Nest and IFM expect to capitalise on “significant” UK private market investments and “unlock” global investment opportunities, with Nest intending to invest around £5bn through IFM by 2030.

This partnership will support Nest’s ambition to diversify and increase its allocations to private market assets from 17 per cent (£8bn) to 30 per cent (£30bn) in the coming years.

Nest and IFM will collaborate on investment strategies, allowing Nest to pursue private market opportunities that deliver greater returns for its members.

Nest said it intends to invest in IFM’s infrastructure, debt, and private equity capabilities – with a "key" focus on new UK investment opportunities.

These investments include investing in real assets across the UK, building upon the existing UK assets held within IFM funds, including Arqiva, a British telecoms company, the M6 toll road, and Manchester, Stansted, and East Midlands Airports.

In particular, Nest CIO, Elizabeth Fernando, confirmed at a media briefing yesterday (4 February) that the first investment will be in a global infrastructure debt fund.

She added that the partnership has other funds in mind but is still working out some of those details.

“One of the really attractive things about this partnership is the ability to co-create a product that meets the needs of Nest and Nest members but will then also work for IFM’s other clients and shareholders,” Fernando added.

Commenting on the investment, Nest Invest CEO, Mark Fawcett, said: “By joining forces with IFM we are taking a crucial step towards our goal of investing 30 per cent of our assets under management (AUM) into private markets by 2030.

“We’re excited to leverage IFM's expertise and scale to unlock more private market opportunities that can drive stronger and more impactful returns for our members.

“With £10bn of our AUM already invested in the UK, our goal is to grow this to £20bn, and our partnership with IFM will be instrumental in helping us get there.”

Fawcett also noted that this investment was a “great opportunity” to align with like-minded investors and by taking advantage and leveraging IFM's expertise in private markets, it intends to "accelerate" its investments.

Adding to this, IFM Investors CEO, David Neal, stated: “Nest will support IFM’s further expansion into new investment opportunities and markets across the globe, bringing UK expertise into IFM’s ownership group, as we seek to give pension fund members greater access to global markets that have the potential to deliver risk-adjusted returns for their retirement.”

IFM Investors chair, Cath Bowtell, called the partnership a “historic milestone” in IFM’s history, which came about due to a shared purpose of investing, protecting, and growing the long-term retirement savings of working people.

Fawcett confirmed that the financial terms of the private deal would not be disclosed. 

This article was first published on Pensions Age, our sister title.

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