Macquarie Asset Management and Just Group are investing £400m (€466m) in notes related to a portfolio of commercial ground leases.
The notes are secured against a portfolio of 55 Asda supermarket sites across the UK.
Macquarie said the transaction enabled Asda to raise £400m of long-term financing and retain its freehold property interests, while Just Group and Macquaries’ investors have gained exposure to a “high-quality, long-term income stream from ground lease payments”.
Ground leases are increasingly used as a way to match the liabilities of UK defined benefit (DB) pensions. Just Group specialises in insuring and de-risking DB pensions, and Macquarie have been investing in UK ground leases since hiring Hugo James and Tom Benham from Alpha Real Capital in 2020.
James, managing director at Macquarie, said: “As the pace of risk transfer from pension funds to the insurance sector continues to grow, our ability to structure and invest in high-quality income streams is increasingly important for our clients.
“We believe that the innovative structure created for this transaction can provide borrowers with a scalable financing option not previously available in the asset class.”
Nenna Gilmour-Platt, head of investment strategy at Just Group, said: “We help people achieve a better later life – it’s our purpose at Just and why we exist. Investments like this help us fulfil that purpose by providing long-term income for our customers, and at the same time enable businesses to continue to provide essential services to communities around the country.
“We’re pleased to add this to the portfolio of investments we’ve completed with Macquarie in healthcare, education and local authority sectors across the UK.”
Just Group and Macquarie have made a number of investments together, including providing £30m of financing to develop a healthcare service facility in Southampton.