Banking giant creates £500m fund to invest in public infrastructure
Barclays is to create a £500m fund to invest in the UK’s public infrastructure.
The bank’s Senior Debt Infrastructure Fund I will invest in social infrastructure (such as healthcare and education), economic infrastructure, renewable energy, electricity transmission and waste-to-energy senior debt executed by Barclays Corporate.
According to Barclays, the fund will have exclusive access to projects funded by Barclays Corporate and will be seeded with £200m of assets to give investors an immediate return from day one. The bank is to retain a 20% interest in each asset alongside the Fund.
The creation of the fund – currently at the book-building stage – is related to the government’s National Infrastructure Plan, which sets out £200bn of UK infrastructure investment over the next five years.
“To finance this level of investment the government will need to attract long term debt not only from banks but also from other institutional investors,” Barclays said. “However, institutional investors have few opportunities to access UK infrastructure debt, and a number of banks have either exited the market or reduced their exposure to the infrastructure sector.”
David Cooper, Head of Infrastructure Debt at Barclays Corporate, said it was clear that additional sources of finance would have to be accessed to meet the UK’s infrastructure needs.
He added that the fund was a response to the government’s call for the private sector to provide solutions. It is thought likely that the fund will be attractive to institutional investors such as pension funds, insurers and Sovereign Wealth Funds.
Cooper said: “The £500m limit for Fund I is a modest aim to begin with. We expect to see institutional investors supporting the modernisation of significant elements of UK public infrastructure whilst gaining long-term exposure to this attractive asset class. If demand is as expected, we hope this will be the first of many.”
- Details
Barclays is to create a £500m fund to invest in the UK’s public infrastructure.
The bank’s Senior Debt Infrastructure Fund I will invest in social infrastructure (such as healthcare and education), economic infrastructure, renewable energy, electricity transmission and waste-to-energy senior debt executed by Barclays Corporate.
According to Barclays, the fund will have exclusive access to projects funded by Barclays Corporate and will be seeded with £200m of assets to give investors an immediate return from day one. The bank is to retain a 20% interest in each asset alongside the Fund.
The creation of the fund – currently at the book-building stage – is related to the government’s National Infrastructure Plan, which sets out £200bn of UK infrastructure investment over the next five years.
“To finance this level of investment the government will need to attract long term debt not only from banks but also from other institutional investors,” Barclays said. “However, institutional investors have few opportunities to access UK infrastructure debt, and a number of banks have either exited the market or reduced their exposure to the infrastructure sector.”
David Cooper, Head of Infrastructure Debt at Barclays Corporate, said it was clear that additional sources of finance would have to be accessed to meet the UK’s infrastructure needs.
He added that the fund was a response to the government’s call for the private sector to provide solutions. It is thought likely that the fund will be attractive to institutional investors such as pension funds, insurers and Sovereign Wealth Funds.
Cooper said: “The £500m limit for Fund I is a modest aim to begin with. We expect to see institutional investors supporting the modernisation of significant elements of UK public infrastructure whilst gaining long-term exposure to this attractive asset class. If demand is as expected, we hope this will be the first of many.”
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