John Laing to float environmental fund

The UK firm is seeking up to £174m for the vehicle, which will have a seed portfolio of seven projects bought from its parent group.

John Laing Environmental Assets Group (JLEN) today announced its intention to launch a placing and IPO on the London Stock Exchange.

The Guernsey-incorporated company is targeting £160 million (€192 million; $262 million), with the option to increase the size of the issue to around £174 million. John Laing has pledged to subscribe 24.9 percent of the float as a cornerstone investor. It could increase its stake to up to 29.9 percent.

The fund will be run by investment advisers David Hardy and Chris Tanner, both currently at John Laing Capital Management.

It will start its life with a seed portfolio of seven assets comprising one solar project (Amber Solar), three onshore wind farm projects (Bilsthorpe Wind, Castle Pill & Ferndale Wind and Hall Farm Wind), two waste processing projects (D&G Waste and ELWA Waste), and one wastewater treatment project (Tay Wastewater).

The vehicle also intends to acquire a 74.9 percent stake in Branden solar farm, subject to sufficient proceeds being raised upon IPO. Completion of these transactions is expected at or shortly after admission on the exchange.

All of the seed portfolio projects, located in the UK, are fully operational. The onshore wind projects have a total generating capacity of 44 megawatts (MW), while the two solar plants have a combined capacity of 25 MW. The waste management assets comprise mature operating Private Finance Initiative (PFI) contracts in Scotland and East London.

“We’re not a renewables fund. We’re an environmental infrastructure fund. So we have a greater investment remit breadth than dedicated renewables funds,” Tanner told Infrastructure Investor.

The IPO prospectus will be issued next week, with admission expected in the second half of March, he said.

The launch further underscores the popularity of environmental funds in the UK, which has seen a number of vehicles – including Bluefield Solar, Foresight Income Solar Fund, The Renewables Investment Group and Greencoat UK Wind – successfully float in London last year. Ingenious Clean Energy, a fund managed by Ingenious Capital Management, also announced its intention to seek a listing in January.

John Laing’s move replicates the launch of John Laing Investment Fund in November 2010, which was primarily aimed at acquiring social infrastructure assets. JLEN expects to have right of first offer on about £185 million worth of John Laing environmental assets within the next three years.

“John Laing has been building an environmental infrastructure business steadily over the last three to five years, and is now in a position where it wants to continue expanding that business. The time is now ripe to launch a fund in a similar fashion to sell some assets to it but also put it into the market for investors. This has been John Laing’s strategy for probably two years. It’s just that we’ve come to market at a time when it’s busy for renewables funds,” Hardy said.