Legal & General Investment Management (LGIM), the investment arm of UK insurer Legal & General (L&G), has combined its infrastructure and property teams to form a single real assets division.
The move will see Bill Hughes, who joined the company in 2007 as managing director of L&G property (LGP), become head of the newly formed unit.
“Demonstrating L&G’s continued commitment to being at the forefront of sophisticated understanding and investment into new emerging sectors, this change allows us to further capitalise on the synergies that exist across our infrastructure and property businesses,” Hughes said in a statement.
L&G’s real estate assets under management have doubled from about £7.5 billion (€9.8 billion; $11.4 billion) in 2008 to over £15 billion at the end of 2014, according to the company.
Hughes has also headed up the creation of LGP’s lending arm, which has closed a total of £1.08 billion of debt deals across 12 transactions to date. LGIM’s infrastructure team, on its side, has issued around £800 million of loans across 11 deals in the past two years.
L&G – alongside Prudential, Aviva, Standard Life, Friends Life and Scottish Widows – was part of the six UK insurers that in December 2013 pledged £25 billion of investments in infrastructure over five years.
It sees “long term investment in the country’s fabric” as part of a “of a logical handover” of infrastructure investment from banks to insurers and pension funds, it said.
L&G said it has already invested £4.6 billion of an additional £15 billion commitment to UK property and infrastructure on behalf of its savings and pension schemes.
“Like real estate, we recognise that infrastructure offers attractive inflation protection and stable yields against which we can match our long-term pension liabilities,” Hughes said.