LGIM Real Assets (Legal & General) announces the completion of a £450m refinancing for its Industrial Property Investment Fund (“IPIF”/ “the Fund”), with the potential to extend the facility to £550m subject to lender support.
22 Jul 2020
The debt facilities include a £200m long-term fixed rate loan, allowing investors to to benefit from the low interest rate environment, and a £250m revolving credit facility so the Fund can respond to market opportunities as and when they arise. Funding will be provided by a syndicate of relationship lenders including lead agent Wells Fargo Bank N.A., as well as RBS International and Lloyds Bank.
The Fund, which is valued at over £2.3bn, specialises in multi-let industrial and trade assets largely in the South East of England. As at the end of June 2020, it had delivered the highest returns in the AREF index over 3, 5 and 10 years, with for example the Fund delivering a return of 16.2% pa over the last 3 years compared to the PFI all-property index return of 3.9% pa. During the lockdown period, the Fund remained “open” and has received no redemption requests.
New financing for the Fund was agreed following its conversion from a closed-end, fixed-life vehicle to an evergreen open-ended fund, allowing for more availability of finance options.
Jonathan Holland, Senior Fund Manager of IPIF at LGIM Real Assets: "The securing of a new debt facility for the Fund will help boost our investment capacity and take advantage of new market opportunities, including a rise in demand for e-commerce and last-mile warehouse facilities.The Fund has remained incredibly resilient during the lockdown period, continuing to significantly outperform the market, retain high occupancy levels and secure high-value deals across transport corridors in the South East of England. Over the coming months, we will continue to push forward with the Fund’s strategy, looking for new opportunities to broaden our leading position in the mix-box development market."
Max Sinclair, EVP and Head of UK Commercial Real Estate (CRE): "This is a high quality business which continues to provide first class returns to its investors, and despite challenging current market conditions it has shown strong resilience. Acting as the lead agent, we are delighted to have been given an opportunity to extend and deepen our relationship with IPIF alongside our co-lending peers."
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with £1.2 trillion in total assets under management1 of which 40% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
1Data as at 31 December 2023.
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
alternative debt.
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
IMPORTANT INFORMATION
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.