Railpen investment boss on plans to double infrastructure exposure
Mads Gosvig, the chief officer of pensions investment management at Railpen wants to see the $46bn fund’s investment in infrastructure to go up from $1.3bn to $2.7bn over the next five years
Good morning. We recently caught up with Mads Gosvig, the chief officer of pensions investment management at Railpen - the $46bn pension fund for UK rail employees.
Gosvig says the fund is planning on nearly doubling its exposure to infrastructure.
He said: “We have revisited our clients’ exposures to illiquid assets. We have been ramping up our exposure to infrastructure over the past few years - we used to have more infrastructure investments 10 years ago and now we are coming back to it, although we never took our infrastructure exposure to zero.
“Our exposure sits at just over £1bn now, and we believe that the time is right with the alignment of opportunity, asset valuation and complimentary government policy, particularly in the UK, to increase our focus on infrastructure.”
Railpen has a target exposure of £2bn - or $2.7bn - within five years.
Gosvig said: “Rebuilding that exposure, we’re predominantly focusing on the UK. We are doing it through direct investment in the UK where we have boots on the ground, and primarily with partners overseas where we do not have as strong local knowledge.”
Railpen will seek to grow its infrastructure team as its fund grows.
For its private equity exposure, Railpen works with general partners with a goal of co-investing alongside them.
Gosvig said his ambition was to have 50 per cent of its private equity exposure coming through co-investments - the level currently sits “a bit below that”.
About 10 per cent of its private equity exposure is direct.
The British government (which at the time of writing is still the same one that was in place last week) has been very keen on encouraging pension funds in the UK to invest in British assets.
But this initiative is not the reason Railpen is focusing on the UK as it rebuilds its infrastructure exposure.
Gosvig said: “We don’t set our strategy in response to the government, we set it in response to what our clients need.
"We do believe that investing in the UK is a good thing. More than 20 per cent of our growth assets are in the UK
"We do that because we believe it is the right thing to do to help secure our members’ futures, not because the government wants us to."
