Asset manager Henderson has started plotting an exit strategy for its Henderson PFI Secondary Fund II, the controversial owner of UK developer John Laing, an investment whose shelf life expires in three years, sources familiar with the matter told Infrastructure Investor.
Raised in 2006, the 10-year fund earned notoriety for taking the £573.5 million (€718.4 million; $912.7 million) garnered from investors to buy into Private Finance Initiative (PFI) assets and using it solely to acquire John Laing, a well known PFI developer.
That decision eventually prompted a high-profile lawsuit from a majority of the fund’s limited partners (LPs) – subsequently settled out of court – who felt Henderson had breached its mandate with the acquisition.
With 2016 getting closer, sources said Henderson has started assessing its options for John Laing, which could include an outright sale or a stock market listing, perhaps as early as next year. A spokesman from Henderson declined to comment on the sale plans.
Whoever buys John Laing will also get the developer’s minority stake in the John Laing Infrastructure Fund, a London-listed spin-off with a market capitalisation of more than £575 million and a portfolio of 38 low-risk infrastructure projects across the UK, continental Europe and North America, mostly sourced from John Laing.
The start of Henderson PFI Secondary Fund II’s exit strategy comes after Henderson and 22 of the fund’s LPs settled out of court in January.
A majority of Fund II’s LPs – aghast at seeing their £573.5 million investment in Fund II worth 30 percent less and delivering an internal rate of return (as at June 2012) of minus 8 percent – attempted to sue Henderson last year alleging breach of mandate. The 22 claimants included the pension funds of the BBC, BAE Systems and Tesco, among others.
London’s High Court sided with Henderson last November, opening the door for January’s settlement, which saw Henderson shoulder its LPs’ legal costs but with no admission of liability.