Dutch asset manager PGGM is investing up to €130m to buy a 50% stake in Royal BAM Group’s public-private partnership (PPP) projects arm.
PGGM has agreed to pay an initial €100m for the interest in BAM PPP followed by a €30m future performance-related payment, in a deal which extends an ongoing partnership between the companies.
BAM PPP runs a portfolio of 49 concession-based infrastructure projects in the UK, Ireland, the Netherlands, Belgium, Germany and Australia with a total value of €12.1bn.
The deal follows an earlier agreement between the €252bn pension asset manager PGGM and BAM last August, which saw the former increase its share in the 21 projects within BAM PPP PGGM Infrastructure Coöperatie UA from 80% to 90%, representing an investment of €39m.
Kieron Meade, managing director, BAM PPP, said PGGM’s cash injection “will now help us unlock major opportunities in the new wave of PPPs emerging in selected global markets”.
BAM has seen its revenues hit hard by the coronavirus crisis, registering an operating loss of €81.8m in the first nine months of 2020. After it was announced on Monday, BAM’s stock rose by 20%.
In August, PGGM investment manager Natasha Mol insisted, however, that the pension asset manager was not doing a deal with BAM in order to help it weather the crisis.
“This is a conscious choice to increase our investments in this type of assets,” Mol said at the time. “The long-term horizon and stable returns fit well with the demands of our client [healthcare pension fund] PFZW.”
In response to a question from IPE Real Assets, PGGM said it is planning to further increase its investments in infrastructure beyond its cooperation with BAM.
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