John Laing to list £270m fund and sell assets

UK developer John Laing has announced its intention to float a new fund – the John Laing Infrastructure Fund – on the London Stock Exchange, with the intention of raising up to £270m. The proceeds from the float will buy mature assets from John Laing itself.

John Laing, the listed UK developer, has launched the John Laing Infrastructure Fund (JLIF), which will aim to raise up to £270 million (€306 million; $433 million) from a flotation on the London Stock Exchange.

After issue costs have been deducted, the fund will use the proceeds to buy up to £256 million worth of mature, yielding infrastructure assets from John Laing. The sale of the assets will coincide with the successful completion of the listing.

John Laing said in a statement that it would hold an equity interest in JLIF of no less than 20 percent and would continue to manage the assets on behalf of the fund.

John Laing said the sale of assets to JLIF was in line with its strategy of selling interests in mature infrastructure projects and reinvesting the proceeds into its pipeline of new primary development opportunities. It said it has committed £60 million to new investment oportunities so far this year with further “significant financial closes” anticipated before the end of the year.

Following the sale of assets to JLIF, John Laing said it would retain interests in 35 projects in the operational phase, 6 in the part-operational phase and 12 in the construction phase.

“The nineteen infrastructure projects we are selling to JLIF have been successful developments for us. We have brought these assets through to the stage when they have become attractive, high quality and stable assets with a robust yield profile,” said Adrian Ewer, chief executive of John Laing, in a statement.

John Laing is currently caught up in a dispute between asset manager Henderson Group, which acquired John Laing in 2006, and investors in Henderson’s second infrastructure fund.

Investors say they were told the fund would invest in low-risk, steady-income projects that form part of the UK’s Private Finance Initiative (PFI), the UK’s standard procuring process for public-private partnerships. Instead, it used the capital to acquire John Laing – exposing investors to John Laing’s pension deficit and contributing to the fund’s steep drop in value.

Henderson said it “is confident that it has no legal liability in respect of these issues and will vigorously defend any proceedings which may be brought”.