UK – The UK pension fund of French construction firm Vinci has acquired the 50% it did not own of a schools PFI project for £5.3m (€6.6m) from listed infrastructure investor HICL.
InfraRed Capital Partners, which manages the HICL portfolio, acquired a 50% share in the Doncaster assets on HICL's behalf in December as part of a 26-asset portfolio. Vinci Pensions, which manages two pension funds operated by Vinci’s UK subsidiary and partners HICL in six other investments, already owned the other 50%.
Alec Comba, finance director of Vinci, said PFI projects represented "essentially UK government debt, providing predictable long-term cash flows at higher yields than either government or corporate bonds to compensate for the individual project risk".
Infrastructure makes up around 6-7% of a combined £219m portfolio, with the balance held in equities, bonds, property, absolute return funds and cash.
The fund has also acquired the equity of a school in Sheffield with similar characteristics to this week's acquisition and a Cardiff regeneration PFI project in a two-tranche deal.
Vinci Pensions had approached the firm, which has 75 assets under management in total, with an offer that gave HICL a small profit on disposal.
"We've been open that we wanted to rationalise the portfolio but we weren't in a hurry," said InfraRed director Tony Roper. "There was no pressure on us to sell."
Roper said the disposal of school projects did not reflect its lack of appetite for the sub-sector. The firm – which targets operational, income-producing assets – last month acquired a 30% equity and loan interest in a Fife, Scotland schools Public Private Partnership project.
None of its 10 largest acquisitions to date, which account for almost half of its portfolio, have been in education. The largest, home office accommodation, accounts for 10% of the portfolio, followed by the Dutch high-speed rail link at just under 9%.
Shareholders in HICL include the BT Pension Scheme Trustees and Hermes Equity Ownership Services.