Press release
Legal & General demonstrates strong value creation through four realisations
Legal & General Capital (“LGC”) recently held a Capital Markets event which provided an overview of LGC’s alternative asset strategy and ambitions[1] . We highlight below several “proof-points” which demonstrate that LGC’s strategy is being executed effectively to generate significant shareholder value.
11 Nov 2021
Full press release
- MediaCity is a long-standing joint venture between Peel Land & Property Group and LGC which has developed Europe’s leading creative, tech and digital hub on the banks of the Manchester ship canal. Last week it was announced that Land Securities Group PLC had acquired a 75% stake in MediaCity for a net purchase price of £425.6m. The purchase price received by Legal & General, together with the £40m of net distributions received through our period of ownership since 2015, have resulted in a total return of 1.6x on the initial investment. We are reinvesting in Manchester through our University and Alderley Park developments.
- Inspired Villages Group (“IVG”) is an operator and developer of later living accommodation established by LGC in August 2017. We recently announced a new 15 year £500m Joint Venture (“JV”) with Natwest Group Pension Fund (“NWPTL”).2 As part of the new JV, LGC has sold a 50% stake in Inspired Villages’ first 11 sites to NWPTL based on an enterprise value of over £300m, for which we received £127m. LGC’s investment in IVG sites at the point of sale was £202.4m, resulting in a return of 1.3x on the initial investment. In addition, the Group intends to sell several surplus Later Living sites over the next few months.
- Pod Point is an electric vehicle (“EV”) charge point provider first backed by LGC in 2019, and in which EDF and LGC are currently the principal investors. Pod Point is benefiting from the strong growth in EVs and, by extension, the growing demand for EV charge points. We expect demand, and Pod Point’s profits, to continue to grow as we move towards 2030, the year from which sales of new petrol- and diesel-powered cars and vans will be banned. The IPO has raised c£120m of gross proceeds to support the ambitious growth plans of this innovative UK company, this implies a return of 3.8x on LGC’s initial investment. LGC now owns c14% of the company (c22% previously).
- Current Health is a platform which supports healthcare organisations by providing a window into patient health at home and enabling them to manage all aspects of in-home care. The recent sale of Current Health to Best Buy has generated a return for Legal & General, including funds it manages, of 5.3x its original investment.3
Collectively, these four transactions are expected to generate a return of 1.6x the initial investment.
Laura Mason, CEO of LGC: “LGC’s recent transactions are valuable “proof-points”, demonstrating LGC’s ability to realise significant value for shareholders from its alternative asset portfolio. We will invest the proceeds from these transactions into further compelling alternative investment opportunities – in the UK and overseas – in line with our 10-12% return ambition range.”
Jeff Davies, Group CFO: “Legal & General has a strong track record of realising value from investments, demonstrated by our 20% ROE. LGC is increasingly contributing to the Group’s financial metrics. Including the proceeds from the previously announced sale of a retail investment back-book in our Personal Investing business4 alongside the LGC transactions, we expect to realise cash income of more than £500m. This puts us in a strong position to continue investing.”
1 LGC Capital Markets Event materials
2 IVG press release
3 Both LGC (Venture Capital, through a fund managed by ADV) and LGRR (our Retail Retirement division) held stakes in Current Health
4 Personal Investing press release
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