INPP buys stakes in nine UK projects

International Public Partnerships, the UK-based listed infrastructure fund, has acquired stakes in nine UK private finance initiative deals for close to £11m. The fund, which raised £100m last year, is considering ‘some fundraising toward the end of the year,’ said director Giles Frost.

UK-listed infrastructure fund International Public Partnerships (INPP) has invested £10.8 million (€12.2 million; $17.4 million) to acquire stakes in nine project finance initiative (PFI) projects in the social accommodation and healthcare sectors, the fund announced today.

The nine PFI projects, which were procured through the UK’s standardised method for developing public-private partnerships, include Liverpool Central Library, in which INPP acquired an 80.1 percent stake, and eight healthcare investments. 

The latter are part of the UK’s LIFT initiative, which seeks to develop primary care services across the country, and include stake acquisitions in the South Bristol Community Hospital, Goscote Palliative Centre and Harrow Neighbourhood Resource Centres, among others.

Together with its recent closing of Robin Rigg, the first UK offshore transmission link promoted by regulator Ofgem, INPP has completed £23 million in new investments this year, the fund said in its annual results presentation for 2010. The listed investor is set to reach financial close on three other offshore transmission links over the course of the year, the first of which is set to close in June, Giles Frost, a director at INPP, told Infrastructure Investor.

INPP raised £100 million in new funds of which £30 million remains for new acquisitions, Frost said, in addition to an undrawn £100 million debt facility provided by Royal Bank of Scotland and National Australia Bank. As such, Frost admitted INPP might do “some fundraising toward the end of the year”.

The fund grew pre-tax profits in 2010 to almost £16 million, up from £11.4 million in 2009. Its net asset value (NAV) has also increased to £542 million as at December 31 2010 from £420 million in the previous comparable period. INPP said that its total shareholder return since listing on the London Stock Exchange in late 2006 stands at 40.7 percent, outperforming the FTSE 250 index of stocks, which is returning 24.4 percent.

Counting its new investments, the listed vehicle now owns stakes in 60 social and transport infrastructure projects across the UK, Europe, Australia and Canada. Since listing, INPP has increased its assets outside the UK by 10 percent, with 52 percent of its assets now located abroad and 48 percent in the UK. The fund is currently looking at opportunities in Australia, Germany and Canada, “in that order,” Frost said.

Close to 100 percent of its portfolio is backed by availability payments – fixed government payments in exchange for making assets available in good condition – with 70 percent of total revenue indexed to inflation. INPP seeks to acquire majority stakes in the projects it invests in with only 18 percent of its portfolio comprising minority stakes. 

INPP is being advised by Amber Infrastructure, which employs 50 dedicated infrastructure professionals – one of the largest teams in the industry, Frost stressed – helping to source deals for the fund.