Pension initiative announces first close
28 May 2012
A private sector scheme to bring pension funds into the delivery of public infrastructure in the UK has announced the first close of its fund.
Hadrian’s Wall Capital and pension fund Aviva Investors has achieved a first close on the Aviva Investors Hadrian Capital Fund 1, which includes investments from Aviva Life & Pensions UK Ltd, the European Investment Bank, and the Development Bank of Japan.It is understood that the fund has raised around £160m in its first close.
The Hadrian’s Wall scheme has been closely watched by the industry, as it has looked to offer institutional investors a safe alternative to infrastructure investment, and will see the infrastructure company in a project issuing investment grade infrastructure senior debt which is then split in two tranches.
The first tranche is purchased by the fund as a subordinated infrastructure bond and the second tranche, whose credit is enhanced by the fund’s investment, is placed as senior infrastructure bonds on the capital markets.
“Pricing should be competitive relative to available alternatives and borrowers will just have to deal with a single, experienced counterparty,” said Hadrian’s Wall chairman and founder, Marc Bajer.
“The fund will ultimately support the deployment of senior debt financing across both sterling and euros of approximately £/€10 billion at target fund size.”
