The UK government has announced that Australian infrastructure investors and businesses plan to invest £28.5bn (€33.6bn) in projects in the country, following a UK-Australia investment roundtable at Downing Street on Wednesday evening.
The government said the intention to funnel billions of Australian dollars into the country “underline the growing appeal of the UK’s dynamic economy and workforce for foreign investment” and would “create thousands of jobs”, supporting its ‘levelling-up’ agenda.
It comes less than a year after the UK government called on domestic UK institutional investors to allocate more capital to UK infrastructure and businesses.
Nearly half of the £28.5bn was attributed to financial services group and global infrastructure investor Macquarie Group, which the government said “plans to support £12bn of investment by 2030” in infrastructure projects including offshore wind, broadband and hydrogen hubs.
The announcement comes just days after Macquarie and British Columbia Investment Management Corporation acquired a 60% stake in National Grid’s £9.6bn gas transmission and metering business, and coincides with today’s news that Macquarie bought a stake in UK-based renewable energy developer Island Green Power.
Macquarie, the world’s largest global infrastructure investment manager, has long invested in the UK and in 2017 acquired the Green Investment Bank from the UK government.
As part of the government announcement, Macquarie Group managing director and CEO Shemara Wikramanayake said: “The UK was our first destination when we expanded internationally in 1989, and has remained a strong focus for our investment activity ever since.
“The UK has been a world leader in the positive utilisation of private capital to meet essential infrastructure needs of communities, including as a global leader in investment in the energy transition.”
AustralianSuper, the largest superannuation fund in Australia, represented more than a quarter of the government’s £28.5bn figure and is forecast to invest £8bn in the UK over the next five years.
This includes its recently announced investment in the 53-acre regeneration project in London’s Canada Water with British Land.
IFM Investors, another global infrastructure investment manager, owned by Australian superannuation schemes, is set to “deliver £3bn in investment into the UK over five years”, the government said.
Some of this would go to maintain existing assets, including the M6 toll road and Manchester, Stansted and East Midlands airports. IFM’s net-zero fund is also intended to support large-scale infrastructure energy transition projects in the UK, including in electrification, carbon capture and solar power.
IFM has been pushing the UK government to adopt a new financing model to fund infrastructure projects with pension fund capital.
CEO David Neal said IFM had “been investing in core UK infrastructure for decades and now are planning to almost double our investment over the next five years”.
He said: “We believe the deployment of pension capital in partnership with the UK government will be critical to supporting the UK’s energy transition and net-zero ambitions over the next 25 years.”
The government also said real estate investor and developer Lendlease plans to “deliver £5.5bn of investment” across regeneration projects in London and Birmingham.
Tony Lombardo, global CEO of Lendlease, said: “We stand shovel ready with the British government and our partners to deliver vital new homes, parks, offices and jobs for the UK and its people. In line with our world-leading decarbonisation targets, we’ll be striving to make these places and neighbourhoods some of the most sustainable in the UK.”
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