Legal & General Investment Management (LGIM) has provided the lion’s share of a £580 million ($820 million; €734 million) senior debt injection into London Gateway Port, the UK’s first new port in more than 20 years.
The firm made the investment on behalf of Legal & General Retirement, the UK insurer’s pension, and the Pension Protection Fund, an institution that pays compensation to UK workers when their employers go bust. They contributed £250 million and £150 million respectively.
The other two investors involved in the transaction are reportedly the German Doctors Pension Fund and MEAG Munich Ergo, which are said to have disbursed £70 million and £110 million respectively.
“The PPF continues to build out its exposure to alternative hedging strategies. These provide diversification benefits, as well as an attractive risk adjusted return to benefit our members and levy payers,” Sarah Wall, portfolio manager at the Pension Protection Fund, said in a statement.
The 30-year loan proceeds will go towards refinancing the port’s existing project finance facility and funding the port’s third berth. The loan was arranged by Citi on behalf of DP World, the world’s fourth-largest global port operator and owner of London Gateway.
Situated on the Thames estuary, the port is set to add 3.5 million container TEUs (twenty-foot equivalent units) to Britain’s current capacity.
“Funding the port with long-term capital will help UK businesses grow by increasing global trade; in return pension funds will derive an income to pay their pensioners,” said Kerrigan Procter, managing director of Legal & General Retirement.
LGIM hired Erik Westermark last month as senior investment associate, bringing the asset manager’s infrastructure team to six. Westermark joined less than three months after LGIM hired Declan O’Brien for the newly created role of infrastructure strategist in a bid to boost synergies with its real estate unit.