The fund, a limited partnership with an anticipated life of 28 years, will invest in established healthcare, education and accommodation projects in the UK, which are currently owned by Lend Lease and commit capital to fund the acquisition of future projects delivered by Lend Lease.
On completion of the transaction, Lend Lease will make approximately £75m from the sale of these initial assets into the fund. A further £30m or so will be paid by the fund to Lend Lease assets still in construction and commissioning are eventually transferred.
The remaining commitments to the fund are expected to be invested over the next five years in additional Lend Lease PFI/PPP projects. The fund’s seed portfolio of assets has been created by the Lend Lease Group over the last decade.
Lend Lease has a 10% co–investment in the fund, which it will manage while continuing to provide asset and facility management services for these assets.
Lend Lease group CEO and managing director Steve McCann said the fund would leverage off the specialist PFI/PPP and investment management skills within the group.
“The fund will gain exposure to Lend Lease’s portfolio of core social infrastructure assets and is in line with the group’s strategy to invest alongside third party capital,” said McCann.
“The fund will benefit from our integrated model including our established asset management and facilities management capabilities and there is the ability to grow the investment with similar assets from our pipeline. The transaction also completes our targeted capital recycling of PPP equity positions in the UK and delivers an attractive return on that equity. It is very pleasing to see the UK business continue to deliver on its strategic milestones.”