The pension fund for UK members of parliament is diversifying its infrastructure allocation away from renewable energy after taking a hit on a BlackRock renewables fund that came under criticism from the Reform Party.
The £855 million ($1.1 billion; €983 million) Parliamentary Contributory Pension Fund (PCPF) manages assets for MPs and government ministers.
The trustees had allocated 10 percent of the portfolio to renewable energy infrastructure mandates, split between BlackRock’s Global Renewable Power III fund (GRP III) and Foresight’s Energy Infrastructure Partners fund.
Both funds provide exposure to renewable energy, as well as supporting infrastructure including grids and battery storage.
However, BlackRock was forced to write down the value of its fund – which raised $4.8 billion in total – after writedowns on investments in renewables firms Northvolt and SolarZero triggered a broader look at assets in the portfolio.
According to data from affiliate title Infrastructure Investor, the fund has an internal rate of return of -13.8 percent. Responsible Investor understands that the trustees of the PCPF have been keeping close oversight of the mandate and pressing for greater transparency on the fund since the announcements were made.
BlackRock declined to comment.
In a member update seen by RI, the PCPF said it plans to maintain the 10 percent infrastructure allocation while “diversifying beyond renewable energy”. It will recommit to the next vintage of the Foresight fund and is carrying out a search for a diversified infrastructure manager to top up the allocation as GRP III returns capital.
Richard Tice, deputy leader of the right-wing populist Reform Party, wrote to trustees last year to complain about the fund’s focus on ESG and climate-focused investments, blaming this for its underperformance of the benchmark.
A House of Commons spokesperson declined to comment. At its last valuation, the PCPF was 122 percent funded and, as of March last year, had a surplus of £172 million, up from £77 million in 2024.
The fund has also decided to commit 5 percent of its assets to a Newcore social impact fund and 5 percent to a UK affordable housing fund managed by Savills Investment Management.
PCPF has also engaged with its public markets asset managers on their stewardship of firms in its portfolio with high climate risk, using responses as “a base for challenging the managers on their approaches to engaging with these high-risk companies”.
According to the member update, trustees posed a series of questions on both climate and executive remuneration to managers after the PCPF identified high-risk firms in its equity portfolio. As of Q4 last year, the carbon intensity of the fund’s equity and Buy and Maintain portfolios remains around 40 percent lower than the benchmark.