A fund managed by Arcus Infrastructure Partners and GLIL Infrastructure are buying a UK smart metering business from BUUK Infrastructure No. 2.

Arcus European Infrastructure Fund 2 (AEIF2) and GLIL, the £2.5bn open-ended fund backed by a number of UK local government pension schemes (LGPS), have teamed up to acquire Smart Meter Assets 1 (SMA) for an undisclosed sum.

SMA finances and leases smart meters to energy suppliers under long-term contracts. The company has an installed meter portfolio of 1.6m meters and is expected to achieve a total roll-out of over 2m smart meters.

Katya Romashkan at GLIL, who is joining the board of SMA, said: “Energy assets like SMA are a critical part of the country’s future infrastructure and key to building a sustainable economy. We look forward to working with SMA and Arcus, who share our long-term investment horizon and sustainable investment objectives, and to providing stable, inflation-linked returns for our members.”

GLIL, which owns stakes in Anglian Water, Clyde Windfarm and Forth Ports, was established by Greater Manchester Pension Fund and the London Pensions Fund Authority in 2015, and recently raised a further £500m from a number of LPGS. Last week, GLIL was hired as an infrastructure investment partner for UK workplace pension provider Nest.

The acquisition of SMA is Arcus’ second investment in the energy infrastructure sector, having acquired Horizon Energy Infrastructure in November 2019, and the sixth asset in the AEIF2 fund.

Stefano Brugnolo, the Arcus partner responsible for the SMA acquisition, said: “Having reviewed the European smart metering landscape since 2015, we are extremely pleased to acquire SMA, our second investment in this sector.

“SMA is one of the largest meter asset providers in the UK smart metering market, with a complementary opportunity set to Horizon Energy Infrastructure. We look forward to working with both businesses as they play a leading role in the evolving UK energy landscape.”

Ian Harding, Arcus co-managing partner and head of origination, said: “This newest investment demonstrates our continued conviction in the merits of investing in energy infrastructure and the UK market, areas where the Arcus team has deep sectoral knowledge.

“SMA falls neatly within Arcus’ mid-market investment strategy as an energy business providing integral infrastructure and services, with strong cash flow generation that is part of the transition to a resilient and decarbonised energy system.

”This investment into SMA will transform our UK metering platform into two strong businesses with expected synergies that will provide attractive, risk-adjusted returns for our investors into the future.”

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