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BTPS

How we invest

The Scheme’s main objective is to ensure there are sufficient assets to pay the right benefits at the right time to members and their beneficiaries under the Rules of the Scheme.

As more of the Scheme’s members reach retirement, the matching of assets and liabilities will be increased with the investment portfolio transitioning towards bond and bond-like investments. By 2034 we intend for our assets to provide adequate income plus capital repayments to meet members’ benefit payments as they fall due.

The distribution of Investments - asset class

30 June
2023
Equities 14%
Property 9%
Absolute return 3%
Infastructure 3%
Government bonds, cash and other net assets 3%
Corporate bonds 25%
High yield Corporate bonds 3%
Secure income 14%
Emerging market debt 1%
 

Investment grade credit

The Scheme owns approximately £10bn of corporate bonds which form part of our cash flow matching portfolio.

The purpose of the cashflow matching portfolio is to efficiently exploit the natural liquidity of bond and bond-like assets to further improve confidence that benefit payments can be met as they fall due. On June 2023 approximately 48% of the Scheme’s exposure to investment grade corporate bonds was allocated to UK corporate bonds and the remaining 52% was invested globally.

Government bonds & cash

The Scheme owns, and Brightwell manages approximately £10bn of conventional and index-linked government debt to hedge part of its inflation and interest rate risk.

Property

Around 9% or £3.3bn of Scheme assets are invested in property, comprising of a diversified mix of offices, industrial property, retail and residential assets. These investments provide the Scheme with income and over the long term, the value of commercial property has been shown as an asset class that keeps pace with inflation.

The Scheme has had success in developing a number of mixed use city centre “estates”.

King’s Cross is the largest and highest profile of these and is emblematic of the strategy: creating attractive places where work, leisure and education, across a range of sectors co-locate in a vibrant public realm. Sustainability in its broadest sense is at the core of our approach and involves having low environmental impact, job creation and partnerships with local councils.

  • King’s Cross Estate

    King’s Cross Estate

    King’s Cross Estate is the largest urban regeneration programme in Europe regenerating a 67-acre site. Since 2008, the former railway industrial land site has been transformed into one of London’s great estates. Some of the existing tenants include Google (European HQ), DeepMind, Universal Music, XTX and University of the Arts London. 2,000 new homes have been built, 650 affordable housing.

  • Birmingham Paradise

    Birmingham Paradise

    Paradise is located in the historic civic heart of Birmingham and is widely recognised as one of the most important city centre developments in the UK, outside London. A 17 acre site that is being transformed into a vibrant civic, retail, leisure and hotel space, providing major improvements to pedestrian access across the city.

  • NOMA

    NOMA

    Manchester’s most significant urban regeneration scheme and the largest development project in North West England. NOMA is a mixed-use Quarter within Manchester city centre, with a strong vision that balances heritage, community and commercial interests. Similar to Kings Cross, it is delivering a vibrant and authentic destination for working, living and enjoying.

  • Wellington Place Leeds

    Wellington Place Leeds

    Re-generation of a 20-acre site in Leeds to enhance urban life in the city. When complete, more than 16,000 people will work at Wellington place.

Infrastructure

The Scheme has been investing in UK infrastructure since 2011. Current investments are valued at approximately £1.1bn. Some examples are below:

  • Fallago Rig

    Fallago Rig

    The Scheme invested in Fallago Rig – one of the largest onshore windfarms in the UK – in 2013 alongside energy company EDF. Located in the Scottish Borders, its 48 turbines generate 144MW of clean electricity – enough to power 86,000 homes. The asset also avoids more than 100,000 tonnes of CO2 annually.

  • Viridor

    Viridor

    Viridor is the leading UK waste-to-energy, recycling and waste management company. It is also one of the UK’s largest independent power generators, through Energy Recovery Facilities, anaerobic digestion, solar and landfill. In 2021, their facilities produced 2,315GWh electricity – that’s enough to power the equivalent of 634,250 homes. BTPS indirectly owns a £85m stake through the Federated Hermes Infrastructure Fund.

  • Cadent

    Cadent

    Cadent Gas comprises four of the eight gas distribution networks in the UK. Headquartered in Coventry, it transports gas to 11m homes and businesses across the West Midlands, North West England, East of England and North London. The Scheme was part of a consortium that purchased the networks from National Grid in 2017.

Sustainable investment

Read about our approach to sustainable investment and our goal to achieve net zero greenhouse gas emissions across our investment portfolio by 2035.

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