InfraRed fund acquires £17m school PFI stakes

InfraRed Capital Partners, the management team that spun out of HSBC at the beginning of this month, has completed its first infrastructure deal since then – advising HICL Infrastructure and Kajima Partnerships on the acquisition of three PFI stakes from Kier.

HICL Infrastructure, the UK listed infrastructure investment firm advised by InfraRed Capital Partners, has teamed up with existing joint venture partner Kajima Partnerships – the UK arm of Japanese developer Kajima Corporation – to purchase three Private Finance Initiative (PFI) stakes in the UK schools sector for £17.2 million (€19.8 million; $27.7 million).

The stakes have been acquired from Kier Project Investment, the PPP/PFI arm of UK developer Kier Group, and Dexia Credit Local, a subsidiary of Belgian/French bank Dexia.

The acquired portfolio comprises: a 100 percent stake in the Norwich Area Schools PFI project; a 100 percent stake in the Oldham Secondary Schools PFI project; and a 50 percent stake in the Sheffield Schools PFI project. All the projects reached financial close in either 2005 or 2006 and have been operational for a number of years. The concession dates for the projects come to an end between 2031 and 2033.

HICL Infrastructure – which now has a portfolio of 40 infrastructure investments, 38 of them operational – is advised by InfraRed Capital Partners, the team formerly known as HSBC Specialist Investments, which spun out of HSBC earlier this month.

As part of the agreement, the bank retained a 19.9 percent stake in the $4 billion infrastructure and real estate platform. HSBC also said it would consider commitments to future funds of InfraRed on a ‘case by case’ basis.