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IFM hit by fund withdrawal due to over allocation

IFM earlier this year became victim to the current cycle of limited partners being over-allocated to the sector, with UK local pension Avon withdrawing GBP 150m from the manager’s flagship global core infrastructure fund.

Documents recently published reveal that the Avon Pension Fund “disinvested” – or withdrew – its large commitment from IFM Global Infrastructure Fund in January.

Several UK pension plans also in January sold their stakes in IFM Global Infrastructure Fund to Swiss collective pension foundation COPRE and the pension fund of Switzerland’s Basel Cantonal Bank. 

Avon Pension Fund has not sold its commitment in the IFM fund, according to an analysis of public filings.

Avon Pension Fund could not be reached for comment. IFM declined to comment.

Avon said it withdrew the commitment "for liquidity purposes" and "to address the overweight position to this (the IFM) mandate".

The majority of the GBP 150m was transferred to a BlackRock-managed ETF to "provide liquidity for future capital calls". 

Following the disinvestment, Avon’s core infrastructure exposure at the end of the first quarter this year decreased to 5.3% of its overall portfolio from 8.3%, against a target allocation of 5%.

Disinvestments have not been uncommon over the past year, as the denominator effect and a slowdown in distributions put pressure on LP allocations and liquidity. 

IFM Global Infrastructure Fund is an open-ended fund focusing on core, brownfield assets primarily in North America and Europe and selective other OECD markets, excluding Australia.

IFM’s open-ended fund has raised USD 54bn to date and achieved a net IRR of 11%.

The fund’s latest investment was the acquisition of US-based data centre company Switch last December for a deal value of USD 11bn, according to Infralogic.