Legal & General is helping to finance a fleet of new Bombardier trains for the First MTR South Western Trains franchise.
28 Jun 2017
The £100 million long term debt investment by LGIM Real Assets, on behalf of clients including Legal & General Retirement (LGR) is part of a total £1 billion commitment made from a group of institutional investors to Rock Rail.
This deal represents the largest single UK rolling stock deal for which all senior debt is provided by institutional investors. It is also Legal & General’s second UK rolling stock deal following the backing of a new fleet of East Anglia trains last year.
The core fleet will enter service from mid-2019 and will consist of 90 new trains, made up of 750 electrical multiple unit vehicles and built by UK manufacturer Bombardier Transportation. The trains are designed to accommodate planned, future infrastructure developments forming part of a wider investment programme to improve services across the entire franchise.
Legal & General has invested £8 billion in UK infrastructure, direct investments and urban regeneration projects to date, and aims to invest £15 billion. Long-term capital is a good match for investment into new assets, providing income for pension funds and stimulating UK economic growth.
Kerrigan Procter, Managing Director of LGR, said: “It is great to be involved in another deal where we can make a meaningful impact in helping modernise the UK’s railways. Transport infrastructure is a great investment for us as the long term income it produces helps to pay our customers’ pensions, as well as creating new jobs and driving economic growth - which is good for business and our customers.”
Bill Hughes, Head of LGIM Real Assets, said: “This deal further supports our holistic real assets strategy and demonstrates the deep cross sector expertise that we now have embedded across the platform. This is our second rail-related private debt investment for LGIM’s clients and further expands their exposure to essential infrastructure projects in the UK.
“There is a real need in the UK to improve train services and reduce overcrowding; in return this will act as a stimulus for economic growth. Our clients have a significant appetite to finance such assets which will offer them long-term, stable cash flows.”
LGIMRA is a division of Legal & General Investment Management (LGIM), one of Europe’s largest
institutional asset managers and a major global investor. LGIM manages £1.29 trillion1 ($1.57tn) in
assets, working with a range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
LGIM Real Assets has assets under management of £36 billion2 ($43.8bn) and is one of the largest
private markets investment managers in the UK. Investing in both debt and equity and across the
risk/return spectrum, LGIM Real Assets actively invests in and manages assets across commercial,
operational and residential property sectors, as well as infrastructure, real estate, corporate and
Taking a long-term view in order to future proof our investments, LGIM Real Assets continues to lead the industry in ESG performance, considering all environmental, social and governance issues at asset level as well as portfolio level.
1LGIM internal data as at 30 June 2022. These figures include assets managed by LGIMA, an SEC Registered Investment Advisor. Data includes derivative positions.
2Source: LGIM Real Assets. AUM data as at 30 June 2022.
*at 13 Jan 2023
For professional clients only. Past performance is not a guide to the future. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Views expressed are of LGIM as at 12 January 2023. The Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272.