USS Reinforces Internal Infrastructure Team

(September 14, 2012) — One of the largest pension funds in the United Kingdom has bolstered its in-house investment team with the appointment of two specialist infrastructure managers, as the asset class finds further favour with investors.

The Universities Superannuation Scheme (USS) has appointed Steve Deeley and Rob Horsnall as investment managers for infrastructure, the fund announced today.

Deeley joins from the infrastructure team at UBS Asset Management and Horsnall is an internal promotion. The announcement follows on from the appointment of Gavin Merchant as senior investment manager for infrastructure last year.

Mike Powell, head of alternatives assets, said: “These additions represent a further step in strengthening USS’s capability within Infrastructure and reflect USS’s intention to be a significant and successful direct investor within this asset class.”

Infrastructure has gathered a significant following in the UK as the asset class is a good match for pension funds’ long term liabilities – particularly inflation – and these investors can gain from an illiquidity premium.

The UK government has confirmed that a new platform for pension funds to invest in direct infrastructure project will be ready for launch in January. There is a £2 billion target for initial investment – the project has been supported by the National Association of Pension Funds and the Pension Protection Fund.

USS is one of the largest pension funds in the UK with approximately £33 billion in assets and has a well-established internal team that invests in a range of alternatives.

The fund has been building its internal investment team over the past few years, a process that was expedited when Roger Gray joined as CIO in 2009. Gray told aiCIO in June: “There are two basic drivers behind bringing investment management in-house: cost and alignment. Depending on the scale of the fund and the nature of its allocations, it may make sense to have an internal team.”