Legal & General Completes HS1 Deal
27 Sep 2017
Legal & General announces that it has provided circa £120m of debt in support of the Equitix, HICL and Infrared consortium’s purchase of High Speed 1 (HS1), the high-speed railway connecting London to the Channel Tunnel.
The deal was financed by LGIM Real Assets, on behalf of clients including Legal & General Retirement (LGR), and represents its second investment in UK rail related infrastructure this year after it helped to finance a fleet of new Bombardier trains for the First MTR South Western Trains franchise in June.
The 68 mile line, which opened in 2007, runs from the capital to Kent connecting St Pancras International station with the Channel Tunnel and serves four stations including St Pancras International, Stratford International, Ebbsfleet International and Ashford International. HS1 has a 30-year concession agreement with the U.K. Secretary of State, to operate and manage the railway and the stations along the line, which is the only high-speed railway in the UK at the moment, while plans are being made for High Speed 2.
Charles-Henry Lecointe, Senior Investment Manager, LGIM Real Assets, said: “HS1 reinforces our continued commitment to investing in key UK infrastructure assets which will have a major impact on stimulating economic growth while ensuring long-term cash flow for pension funds. As UK’s only high-speed railway, HS1 is a strategically important asset, connecting South East England with Europe and will generate stable returns for investing pension funds.”
Kerrigan Procter, Managing Director of LGR, said: “Legal & General has invested £12 billion in UK infrastructure, direct investments and urban regeneration projects to date, and aims to invest a further £15 billion. Our financing of this major infrastructure project is a strong investment fit for us as the long term income it produces helps to pay our customers’ pensions, as well as creating new jobs and driving economic growth - which is good for business and our customers.”
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About LGIM Real Assets
LGIM Real Assets is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £951.1bn in assets on behalf of over 3,200 clients (as at 30 June 2017), providing products and solutions spanning all asset classes. LGIM Real Assets, headed up by Bill Hughes, has AUM of £24.9bn (as at 30 June 2017), actively investing and managing assets across commercial property, private residential, infrastructure and property lending and, most recently, corporate credit.
HS1 Ltd has the 30 year concession to own and operate High Speed 1, the UK’s first section of high speed rail, as well as the stations along the route: St Pancras International, Stratford International, Ebbsfleet International and Ashford International. In July 2017 HS1 Ltd. was acquired by a consortium comprising of funds advised and managed by InfraRed Capital Partners Limited and Equitix Investment Management Limited