First ever bank-led UK infrastructure debt fund for institutional investors launched
Barclays Bank plc today announced the creation of the first bank-led UK infrastructure debt fund as an innovative private sector solution to broaden the sources of finance backing UK infrastructure.
Barclays Senior Debt Infrastructure Fund I (the Fund) has a target size of £500m. The Fund will invest in social infrastructure, economic infrastructure, renewable energy, electricity transmission and waste-to-energy senior debt executed by Barclays Corporate which has an established track record of originating and managing these assets. The Fund will have exclusive access to any such projects funded by Barclays Corporate and will be seeded with £200m of assets to give a return from day one. Barclays will retain a 20% interest in each asset alongside the Fund. The fund is only open to institutional investors and not retail investors.
The Government’s National Infrastructure Plan outlines £200 billion of UK infrastructure investment over the next 5 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. 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 is clear that additional sources of finance have to be accessed to meet the UK’s infrastructure needs, and the Government has called upon the private sector to provide efficient and effective solutions. Barclays has responded to this by creating this Fund. It provides access to UK infrastructure debt for institutional investors including pension funds, insurers and Sovereign Wealth Funds.”
The Fund is the first bank-led UK infrastructure senior debt fund, and is currently in the book-building stage. There is good initial demand from prospective investors. It offers long term contracted cashflows and a diversified portfolio.
Most institutional investors cannot access this attractive asset class as the barriers to entry of originating and managing infrastructure deals are high. For institutions who want instant access to a diversified portfolio at day one, the Fund provides an excellent solution to meet their investment appetite without the burden of building their own infrastructure team.
Cooper continues: “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.”
Notes to Editors:
This communication is issued by Barclays Bank PLC. In respect of recipients in the UK, it is directed only at persons in respect of whom an exemption under the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 is available, including but not limited to investment professionals under Article 14(5) and high net worth companies under Article 22(2) of such Order.
About Barclays Corporate
With a clear focus on quality relationships, Barclays Corporate provides integrated banking solutions to businesses with an annual turnover of more than £5 million in the UK and large local companies, financial institutions and multinationals in non-UK markets. We facilitate the success and growth of our clients by providing lending, risk management, cash and liquidity management, trade finance and asset and sales financing. Additionally, our clients benefit from the breadth of the Barclays Group, through access to the investment banking services of Barclays Capital including debt and equity capital markets, the private wealth management expertise of Barclays Wealth, and the card and payment services of Barclaycard. Barclays Corporate employs over 10,000 people globally. For more information please visit www.barclayscorporate.com.
Barclays is a major global financial services provider engaged in retail banking, credit cards, corporate and investment banking and wealth management with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs 147,500 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.barclays.com.
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