27 Jan 2015
10 Downing Street
On 27 January, Bill Hughes (Managing Director, LGIM Property), Paul Stanworth (Managing Director, Legal & General Capital) and Nigel Wilson, our CEO, attended an event at 10 Downing Street, focused on facilitating infrastructure investment and regeneration of UK cities. The keynote theme, which was covered in a speech by Cities Minister Greg Clark, was “the Regeneration of UK Regeneration”.
The event showcased Local Growth Deals, with three cities (Birmingham, Bristol and Leeds) with their Local Enterprise Partnerships (LEPs) proposing infrastructure and regeneration investment opportunities to investors such as institutional pension funds and sovereign wealth funds. Legal & General has been working closely with a number of LEPs since early 2014 as part of a longer-term drive to deliver investment in real assets that contribute to UK economic growth.
At the event Nigel Wilson announced a new Regeneration Investment vehicle to provide a channel for money going into infrastructure and Direct Investments, including property and housing projects. Legal & General will be allocating £1.5bn of capital to the investment vehicle.
Paul Stanworth, Managing Director, Legal & General Capital said: “Based on existing bilateral co-investment transactions and working alongside investment partners, we plan to secure further external funding to take us up to £15bn.”
The investment vehicle will invest in debt and equity, and take construction risk. It will invest in different sectors and projects, and a vehicle of this size could be involved in around 30 to 50 individual projects. Legal & General is well-placed to deliver this model, given that we have already done a similar joint venture with institutional investors in property, so we know the model works and is appealing to investors.
The added advantage of this investment vehicle to our external investors is that it will be collaborating with RIO (HM Government’s Regeneration Investment Organisation). RIO will be acting as a sponsor, and will be able to help facilitate a deal pipeline, as well as work with central and local government on introducing infrastructure projects to investors.