Foresight to take over John Laing’s renewables fund

Foresight Group is to take over the management of the John Laing Environmental Assets Group, five years after the London-based manager’s founder launched the fund.

Nigel Aitchison, head of infrastructure at Foresight, told Infrastructure Investor his firm had been chosen ahead of competitors in an auction run by John Laing Capital Management. He declined to disclose the price of the deal.

Foresight said in a statement that the transaction, which is set to complete at the end of June, would increase its assets under management by 26 percent to £4 billion ($5 billion; €4.5 billion) and boost its global renewable energy portfolio to 190 projects with a total capacity of 2GW.

The JLEN portfolio comprises 28 wind, solar, waste and wastewater treatment sites across the UK and a small number in France. The assets have a total capacity of 279.2MW and a gross asset value of £764 million. JLEN is targeting a net IRR of 7.5-8.5 percent over the longer term.

Aitchison confirmed that JLEN, which John Laing launched on the London Stock Exchange in 2014, would remain listed. He said Foresight had made the acquisition via its balance sheet funds.

“JLEN is its own fund and has its own independent board,” he added. “It’s about providing a high-quality service to the board and its shareholders and building on what’s there already. We can give that support and hopefully expand the scale of what that fund is doing. It’s very much a business development opportunity for us in that way.”

Aitchison said Foresight plans to keep the existing portfolio intact and that little overlap is expected between JLEN and the current Foresight-managed funds. According to the statement, JLEN co-heads Chris Tanner and Chris Holmes will become partners of Foresight Group, and their 12-member team of investment, portfolio and finance professionals will continue to manage the fund.

JLEN made its first bioenergy deal in 2017. It is envisaged that further deals beyond conventional renewable generation will be targeted, according to Aitchison.

“It’s got a broad mandate in terms of environmental infrastructure and I think that places it very well to, over time, look at new opportunities,” Aitchison said. “It’s been to date very focused on UK renewable generation assets, but it’s also got some waste-processing and wastewater treatment assets in it. I think there are other opportunities in those areas, and areas adjacent to that over time that can be accessed.”

He added that Foresight would not frequently repeat moves such as the JLEN acquisition, but that it remained on the lookout for larger-scale deals in Europe and elsewhere.