LGIM Real Assets (“LGIM RA”) announces that it has completed its largest infrastructure debt transaction in the USA having provided, on behalf of its clients including Legal & General Retirement Institutional (LGRI), c.$173 million in long-term financing to LA Gateway Partners, LLC (“LAGP”)*.
11 Dec 2018
LAGP has been selected by Los Angeles World Airports (“LAWA”) to deliver a Consolidated Rent-a-Car Facility (“ConRAC”) at Los Angeles International Airport (“LAX”) under a long-term Public-Private Partnership (“P3”) contract.
LAX is one of the busiest origin and destination airports in the US and the 5th busiest airport by passenger numbers in the world. As a result, there is significant pressure on the existing infrastructure within the vicinity of the airport. LAWA has embarked on a c.$5.5 billion Landside Access Modernization Program, a project which seeks to improve access, reduce traffic congestion, provide more travel time certainty and improve air quality in and around LAX.
In support of this project, LGIM RA has provided long-term debt to facilitate the design, construction, financing, commissioning, operations and maintenance of the LAX ConRAC. Rent-a-car facilities are currently dispersed around LAX, with customers having to travel by mini bus to and from the terminal, adding to the existing congestion and poor air quality around the airport. The LAX ConRAC, which is expected to be operational by mid-2023, will see the construction of a c.5.3 million square foot facility that will consolidate the numerous rent-a-car companies into a single facility. This will be connected to the terminal buildings through rail transportation, seeking to relieve existing congestion from around the vicinity of the airport and improve passenger journey times.
* Los Angeles Gateway Partners (“LAGP”) is a special purpose vehicle created by Fengate Asset Management and PCL Construction.
Tom Sumpster, Head of Infrastructure Finance, LGIM Real Assets, said: “We are delighted to be providing $173 million of debt financing to support both LAGP and LAWA in a significant infrastructure upgrade to one of the busiest airports in America. Having made our maiden infrastructure debt investment in the US in 2016, our involvement in this high-profile transaction demonstrates how quickly LGIM RA has built its profile in America. We will continue to be active in this competitive market as we seek to deploy further capital in the US.”
Eleanor Bucks, Managing Director, Direct Investments and Real Assets, Legal & General Retirement: "...this important infrastructure project [which] will greatly enhance the passenger experience for travellers using Los Angeles Airport (LAX). This transaction further demonstrates our global reach, as well as our commitment to connecting pensions to the real economy. Our investment will improve people's lives and living environment, while securing the pensions of our members."
Notes to editors
Legal & General Investment Management Real Assets (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 £1.28tn in assets (as at 31 December 2020), 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 £36.3bn (as at 31 December 2020) 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. In 2021, we are implementing a strategy as part of our commitment to net zero carbon emissions across the real estate equity business by 2050, and have also committed to measuring social value across 20% of our platform by the end of the year.
(As of June 2021)
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Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these 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. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2021