Gravis listed UK PFI fund raises £40m

GCP Infrastructure Investments, a new infrastructure debt vehicle set up by fund manager Gravis Capital Partners, has raised £40m from an initial public offering on the London Stock Exchange. The fund aims to provide subordinated debt to UK private finance initiative projects.

GCP Infrastructure Investments, a new debt vehicle that will invest in UK private finance initiative (PFI) projects, has issued 40 million ordinary shares on the London Stock Exchange at £1 per share, raising £40 million (€47 million; $61 million). The fund is managed by London-based firm Gravis Capital Partners.

Gravis had initially indicated that it was seeking to raise £50 million.

Stephen Ellis, managing partner of Gravis Capital Partners, said in a statement: “In spite of difficult market conditions, the quality of our concept…and, in particular, the projected 8% net yield and inflation protection, appealed to our core target investors among institutions and private client stockbrokers, and allowed us to achieve a successful close.
The future growth prospects for the sector remain buoyant – despite the current review of some areas of government spending on new projects, the Private Finance Initiative remains a key mechanism for central and local government commitments to deliver social infrastructure efficiently.”

PFI projects have come under intense scrutiny from the UK’s coalition government, as it seeks to extract value for money as part of its austerity programme. Notably, over 700 planned school refurbishments under the previous Labour government’s Building Schools for the Future (BSF) programme were recently axed.     

GCP Infrastructure Fund, which was launched just over a year ago, has already invested in £24 million worth of PFI debt, GCP said. This amount was expected to have risen to £30 million by the time of the new vehicle’s listing. Once GCP Infrastructure Investments channels its proceeds from the public listing it will become the major shareholder in the GCP Infrastructure Fund.