The UK Government has increased the cap placed on the amount that local authority pension funds can invest through limited partnerships from 15% to 30%. Limited partnerships are a legal structure often used for major property, private equity and infrastructure projects. The change will take effect from 1 April 2013.

A number of Local Government Pension Fund (LGPS) funds already invest around 15% of their portfolios in limited partnerships through property and private equity investments and therefore have limited capacity to invest in new infrastructure initiatives.

The National Association of Pension Funds (NAPF) has been lobbying for this an other changes. Darren Philp, Policy Director, NAPF, said:

"Many local authority pension funds have told us that they are prevented from making the best decision on investments because of out dated rules which place limits on the amount that can be invested in infrastructure. So we are pleased that the Government has listened and has made this change.

A new Pensions Infrastructure Platform (PIP) is being created to facilitate pension fund investment in infrastructure. Source: UK National Association of Pension Funds (NAPF)