Legal & General and Patron Capital launch a strategic partnership to invest in long term property-related opportunities with a positive social impact.
17 November 2014
Legal & General Capital and Patron Capital today announce that they have established a new strategic partnership to identify and invest in long-term, operational, real-estate and infrastructure backed investment opportunities with a positive social impact. Patron will act as the primary originator and day-to-day investment manager, using its wealth of experience and resources.
The new partnership, known as the Perpetual Opportunities Partnership (“POP”), supports Legal & General’s strategy to play a greater role in UK housing and infrastructure, with an appetite to provide long-term capital to the energy, housing, urban regeneration and alternative financing sectors. The investments will be made both by Legal & General Capital, L&G’s principal investment team, and Patron Capital as co-investors with Legal & General Capital being the majority stakeholder.
POP will initially focus on the UK and Ireland, principally targeting stable, operationally geared investments that offer strong risk-adjusted returns, whilst also providing a wider positive social impact. The partnership will have a perpetual life cycle, investing for the medium to long term.
The partnership will target assets that do not fit the opportunistic criteria for Patron’s existing funds, given their longer term nature, and do not conflict with Legal & General’s existing direct property origination platforms, given the specific characteristics of these investments. POP will invest strategically and will not be constrained by deal size, although investments are likely to range between £20m and £200m of equity.
Paul Stanworth, Managing Director, Legal & General Capital, said:
“Legal & General is committed to being economically and socially useful to our communities. We believe that by taking a flexible, strategic approach to investing in housing and social infrastructure, we will not only offer our shareholders attractive risk-adjusted returns but also drive UK economic growth and contribute in a significant way to enhancing UK living standards. As such, to date Legal & General has already invested £4.6bn Group-wide across a range of property and infrastructure investments. We are delighted to extend our successful partnership with Patron Capital from co-purchasing CALA Homes to a broader initiative which will significantly expand our pipeline of opportunities into new less congested areas of the market.”
Keith M. Breslauer, Managing Director of Patron Capital, said:
“Having a very positive joint partnership with Legal & General Capital via our origination of the CALA Homes transaction, we are very pleased to establish this second partnership to target long-term operational, people-dependent, real estate investment opportunities. The tie-up with Legal & General will enable us to consider longer-term investments that are lower on the risk-reward spectrum, meaning we will be able to act on a greater proportion of the €9bn investment pipeline we review each year. Corporate Social Responsibility is an integral part of the Patron approach, and this new partnership will enable us to make investments that will positively impact local communities through improving social infrastructure across the UK and Ireland.”
Notes to editors
Media Enquiries to:
Henry Columbine/Emma Kane t: +44 (0) 20 7382 4721
Redleaf Polhill e: firstname.lastname@example.org
Legal & General:
Corporate Affairs Director
Tel: 020 3124 2090)
Head of Corporate Communications
Tel: 0203 124 2095
About Patron Capital Partners
Patron represents approximately Euro 2.5 billion of capital across several funds (including its most recent Fund IV) and related co-investments, investing in property, corporate operating entities whose value is primarily supported by property assets and distressed debt and credit related businesses.
Since it was established in 1999, Patron has invested in over 100 transactions across 61 investments involving approximately 40 million square feet (about 3.7 million square metres) in 13 countries, with many of these investments realised.
Investors represent a variety of sovereign wealth funds, prominent universities, major institutions, private foundations, and high net worth individuals located throughout North America, Europe, Asia and the Middle East. The main investment adviser to the Funds is Patron Capital Advisers LLP, which is based in London, and Patron has other offices across Europe including Barcelona, Milan, Luxembourg and Frankfurt (Dreieich); the group is comprised of 69 people, including a 40-person investment team.
Further information about Patron Capital is available at www.patroncapital.com.
About Legal & General Capital
Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £13.9bn (as at 6th November 2014) and is responsible for investing £676bn worldwide (as at 30th September 2014) on behalf of investors, policyholders and shareholders. We have over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2013, Legal & General's profits before tax (on the IFRS basis) were £1,134m and earnings per share were 15.20p for the period, an increase of 10% for both respectively.
Legal & General Capital (“LGC”) manage the principal investments of the Group. At 30 June 2014, this included the £5.2bn Group Capital funds together with the remaining £43.0bn principal balance sheet which supports the long term insurance reserves of the insurance entities and provide Group Treasury services across the Group. In 2013, LGC contributed £179m (14%) to the Group’s Operating Profit.
Further information about Legal & General is available at http://www.legalandgeneral.com/