Charges on a government-backed UK infrastructure vehicle owned and run by UK pension funds will be capped at 0.5%, the Treasury has confirmed.
The Treasury will announce plans for a Pension Infrastructure Platform (PIP) next month.
It will be the centrepiece of Chancellor George Osborne's National Infrastructure Plan in which pension funds bypass traditional fund managers and club together to invest in infrastructure projects such as building roads and bridges.
Under the plans, pension schemes involved will recruit external professionals to run the PIP.
The platform will be open to other types of investors and charges capped at 0.5% Infrastructure UK chief executive Geoffrey Spence said.
The charge mirrors levels used by the National Employment Savings Trust (NEST).
Spence said: "The intention is this will be an open platform that anyone can join.
"Any UK pension fund can join, but it will be kicked off by a hard core of enthusiasts.
"The aim is that it will be the sort of platform that would not charge any more than 50 basis points for its services."
Spence runs Infrastructure UK, a unit within the Treasury responsible for boosting infrastructure investment.
He added: "The platform would consist of quite a number of different funds.
"Pension funds themselves would pay for the management directly, in the sense that they would own their own fund manager, and that would work closely with government to facilitate the financing of infrastructure projects going forward in the UK."
The move could be a blow to fund management houses, who often offer infrastructure funds with management charges above 0.5%.
"One of the relationships that seems to have gone downhill as result of the credit crisis has been the relationship between pension funds and traditional fund managers in the UK, particularly in the infrastructure space and some types of infrastructure funds in particular, particularly the private equity model," Spence said.
Spence said UK schemes needed to use collective action to access infrastructure as inflation hedging assets.
He said: "Those pension funds need these assets. They realise if they do not mobilise collectively they will face the prospect of the assets available to them to hedge their inflation exposure going elsewhere and being owned by the Canadian pension funds and other types of investors."
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