Land Securities Group PLC has announced that its property partnership business, Land Securities Trillium ('LST') has completed the acquisition of the specialist public private partnership ('PPP') business, Secondary Market Infrastructure Fund ('SMIF').
LST has paid approx. €744 million (£527 million) for the equity of SMIF from former shareholders STAR Capital Partners, Halifax Bank of Scotland, and AMP Capital Investors and has also assumed SMIF's net debt of circa €565 million (£400 million).
The acquisition brings to LST an equity holding in 79 additional PPP projects totalling 2.34 million m² of accommodation. Some 80% of the portfolio comprises public service buildings including schools, hospitals and prisons. The balance of the portfolio lies in infrastructure assets such as highway maintenance and a stake in a water company.
Ian Ellis, Chief Executive, LST, said: "This acquisition positions LST as a leading player in the public private partnership market. Our entry into the sector, just 12 months ago, with our investment in Investors in the Community ensured our position in the primary PPP market. This latest investment in SMIF now gives us access to the secondary PPP market. The two sectors are showing increasing convergence and our collective interests amount to some 100 PPP projects. Our combined expertise in this emerging market will provide our customers with some of the strongest experience in the industry."
Bill Doughty, former CEO of SMIF and now Managing Director of LST Investment Capital, said: "Fully integrating SMIF into the LST business ensures a robust future in the PPP sector for the enlarged business. Over the following months we will be combining our businesses to create a formidable offering of an expanded pool of expertise backed by even greater financial security."
It is anticipated that LST will aim to substantially reduce the capital invested in SMIF through the disposal on an interest in mature projects to third party investors, while maintaining minority stakes and ongoing asset management responsibility. LST will continue to build on SMIF's excellent track record of acquiring PPP interests.
Source: Land Securities