Railways Pension Scheme invests in UK broadband provider

The UK pension fund for railway companies is investing £10m (€11.2m) in an ultrafast broadband provider that has plans to grow its network in London.

RPMI Railpen, the investment manager for the £25.5bn Railways Pension Scheme (RPS), is a new institutional investor for Community Fibre.

The company has also raised £1.3m from existing shareholders.

Railpen’s investment will be in Community Fibre’s equity.

Kieran Thind, investment manager at Railpen, said: “We are excited to be investing in a great company, which is fully focused on bringing full-fibre broadband to communities in London. 

“As a long-term investor, we see our partnership with Community Fibre as a natural fit that will allow us to generate strong returns over time and help fulfil our mission to pay members’ pensions securely, affordably and sustainably.”

The £11.3m of funding is to help the company expand its networks in London. Currently some 10,000 properties in three London boroughs are able to access its ultrafast network and this is expected to reach 40,000 by the end of the year.

It is not the first broadband infrastructure investment Railpen has made.

In May, it provided funding to broadband provider Gigaclear, making a £35m investment and taking £10m of existing shares. The investment was carried out by the pension fund manager’s private markets team.

RPS’s assets are invested through a number of pooled investment funds, the largest of which, the Growth Pooled Fund, returned 17.3% in 2016. Its private equity pooled fund returned 23.1% and its infrastructure fund 24.1%.

The scheme makes new investments in private markets and other illiquid return-seeking assets through its Illiquid Growth Pooled Fund and Long Term Income Fund, which were launched in 2015 and 2016, respectively.

It has been moving to in-house management for its property investments. 

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