The fund manager has bought a 12.5 percent share in the Connect Plus consortium which operates the M25 motorway from Balfour Beatty, providing the developer with a £53 million profit on its investment of, some £37 million higher than initially projected, it said.
Balfour Beatty also has an option to sell a further 12.5 percent at the same price to either Dalmore or fellow project shareholder Equitix before May 2018.
Dalmore and the asset manager entered into the concession agreement in October last year when they and investment firm GCM Grosvenor paid Swedish construction firm Skanska SKr2.9 billion ($344.8 million; €290.7 million) for a 40 percent stake in the project, before buying a further 10 percent from French engineering group Egis two months later. Balfour Beatty retains a 27.5 percent share.
The transaction is the second announced in the past week by the Dalmore fund, which has raised close to £550 million, ahead of its £500 million target. Last Friday it announced the acquisition of a 15 percent stake in Anglian Water Group alongside GLIL from 3i Infrastructure in a deal believed to be worth £580 million.
Future deals pursued by Dalmore Capital 3 could follow a similar strategy of investing in projects it already owns part of, according to documents published by the Strathclyde Pension Fund, an investor in the fund.
“Following initial investment by Dalmore, other co-investors may be encouraged to dispose of assets in the knowledge that, as an existing investor, Dalmore has the capacity to make further investment without the need to undertake significant additional due diligence,” the pension scheme said. “Dalmore, therefore may be able to acquire further interests at advantageous prices.”