Merseyside Pension Fund co-invests in Portuguese hydro power

Merseyside Pension Fund (MPF) is among several institutional investors to have invested in a new co-investment vehicle created by Mirova to own a share of a large Portuguese hydroelectric portfolio.

Portuguese electric utility firm EDP announced in December that it sold the portfolio, located in the Douro valley with 1.7 GW capacity, to a consortium of Credit Agricole Assurances, French operator Engie and Mirova, in a €2.2bn deal.

The Fund is a longstanding investor in infrastructure and has deployed over £250m into the renewables sector.

Peter Wallach, MPF’s Director of Pensions said: “This co-investment should generate good returns for our pension members in a cost-effective way, and the pumped storage facilities within the portfolio will also play a critical role in advancing the region’s decarbonisation of power generation.”

Mr Wallach confirmed that MPF was becoming more interested in direct investments in infrastructure, through both co-investments and its involvement in the GLIL Infrastructure partnership of six UK local authority pension funds.

He said direct ownership was appealing because it offered greater control and lower fees. “We’re not investing blindly, and because we have an established portfolio of assets it means we can more easily target investments that complement the assets that we have,” he said.

“Also of great interest to us is the lower fee load. If we invest directly then we’re paying considerably less in fees than we would be if we were investing in funds.”