At least six companies, Interserve, Amec, John Laing, Costain, Vinci and Kier transferred PPP equity to their pension funds in lieu of cash payments or the transfer of other assets. The fund record ownership of the asset in its accounts and receives future dividends from PPP project companies.
Vinci plc sold a 50% stake in a Cardiff road contract to its pension fund, the Vinci Pension Scheme in 2003. Interserve transferred 13 PPP projects to its pension fund in 2008. Transfer of PFI equity assets is closely tied into the performance of the company since, at least in the case of Interserve, the company retains responsibility for operational management of the facilities. Amec transferred its 50% shareholding in the Inland Revenue Newcastle Estate Partnership to its pension fund for £25m in 2006.
Pension funds invest in PPPs and infrastructure funds in three other ways. Firstly, by direct investment in infrastructure funds. For example, the London Borough of Enfield Pension fund had 14.5m shares (3.19%) stake in International Public Partnerships (formerly Babcock Brown Public Partnerships), the Guernsey based infrastructure fund (INPP Annual Report, 2009 p26). Some pension funds invest in secondary market funds, such as Henderson and Semperian. For example, Greater Manchester and Merseyside pension funds and Swedish AP3 invested in the Henderson £330m infrastructure fund launched in 2005. The London Pensions Authority, the South Yorkshire Pension Fund and the London Borough of Newham Pension Fund were among a group of pension funds to take a 50% stake in the Mill Group's £400m Investors in the Community fund in 2004 (Timmins, 2004).
Secondly, by investing in the shares of construction companies and banks listed on the Stock Exchange in the same way as they invest in other companies.
Thirdly, by investing in consortia that are established to acquire privatised assets such as Associated British Ports (Whitfield, 2010).
Pension funds could ultimately promote the continued sale of PPP equity in order to maintain or increase their returns.