Legal & General Property ('LGP') announces that it has secured a further £117 million (approx. 137 million) of equity for its LPI (Limited Price Inflation) Income Property Fund from three corporate pension schemes, including a substantial commitment from the Michelin Pension Plan. The further investment brings its total commitments to nearly £180 million.
The Fund, which was launched in July 2010, was the first fund to provide Defined Benefit pension schemes with an attractive alternative to comparable asset classes such as index-linked gilts or social housing. Offering an innovative way to invest in property, it seeks to generate a real yield in excess of 4.5% pa from secure, primarily government-backed, inflation-linked sources of rental income.
Having already invested £80 million into the market, the Fund continues to take advantage of the sale-and-leaseback assets currently being offered to LGP through its extensive access to on and off-market opportunities, leveraging its in-house property expertise and close relationships with banks and public sector bodies.
Pete Gladwell, Business Development Manager at Legal & General Property, comments: "This significant further equity injection reflects the strong appetite for the LPI Income Property Fund, as a second-generation long lease fund, which has been designed around clients' requirements. Indeed, we understand it remains the only fund in its peer group able to provide income streams over 20 years in length that provide annual LPI inflation, backed by purely investment grade tenants.
"Our pension fund clients have found this to be an ideal match for their future cashflow requirements, underlined by it having been buy-rated by four of the major investment consultancies, which we believe represents a major vote of confidence in both the Fund's strategy and the capability of the broader platform upon which it relies."