Fundraising

INPP consolidates school portfolio

The London-listed fund has agreed to a new investment and fresh disposals within its Building Schools for the Future assets.

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International Public Partnerships (INPP) has acquired an additional stake in the Kent Building Schools for the Future (BSF) project.

The London-listed fund has bought a 60 percent share in Kier Project Investments’ 80 percent interest in the project, taking its total holding to 58 percent. It will invest £7.2 million (€8.7 million; $11.8 million).

The project comprises three secondary schools on separate sites across Kent, with an average remaining life of 22 years. Structured in the form of a Private Finance Initiative (PFI) project, it is already operational. Kent County Council will own the remaining 42 percent upon completion of the deal.

In two separate transactions, INPP sold its minority stake in the Hull, Leeds, Newcastle, Rochdale and Sandwell BSF projects to the Dalmore Capital Fund, and its minority interest in the Leicester BSF project to Semperian Investments. Both secondary infrastructure investors already had significant interests in these projects.

“INPP determined that it had no realistic scope to increase its holdings in these particular projects to majority controlling holdings and therefore considered, based on the price offered, a sale would be in the best interests for the company,” INPP said in a statement.

The fund stands to receive approximately £18.75 million in proceeds from the sale. It says this amount much exceeds the price it paid for the assets in August 2011, helping generate a significant premium to its initial 8-9 percent IRR target.

The BSF initiative was launched in 2004 by the previous Labour government with the ambition to revamp every secondary school in England over two decades. The programme was later cancelled by the current coalition government, but the schools at which work had started prior to cancellation continue to be actively developed and managed.

INPP, which now manages a portfolio of more than 200 schools, originally invested into the BSF programme when it acquired the government's interest in August 2011. Schools projects represent nearly 27 percent of the net asset value (NAV) of the fund.