John Laing closes in on most of State-backed fund’s assets

UK infrastructure investor John Laing is in advanced talks to buy three of the four assets in the State-backed Irish Infrastructure Fund (IIF) that were put on the market over the summer with a total price tag of over €1 billion, according to sources.

John Laing, which was taken over by US private equity giant KKR last year, has been selected as preferred bidder for the IIF assets, including a contract to operate the Convention Centre Dublin, telecoms towers business Towercom and primary healthcare firm Valley Healthcare, the sources said.

The manager of the fund, Australia’s AMP Capital, is also said to have attracted a number of bids for the IIF’s remaining asset, fibre networks company Enet. However, it is understood that it could achieve a higher value for this business by selling it on a stand-alone asset. That part of the process has been extended to allow for further engagement with the bidders and also to allow others into the mix, sources said.

IIF was set up by Irish Life Investment Managers (ILIM) in 2011, with €250 million of backing from the State’s Ireland Strategic Investment Fund (ISIF), then known as the National Pensions Reserve Fund. AMP was appointed at the discretionary manager of the fund.

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Representatives for AMP, John Laing, ILIM and ISIF declined to comment on the status of the sale process. There are about 20 investors in the fund. US investment bank Jefferies and IBI Corporate Finance in Dublin are managing the process.

John Laing’s move to acquire most of the assets of the IIF comes a year and a half after the British group sold the 35.6-megawatt wind farm it had developed in Co Tipperary for €31.2 million to Dublin-listed Greencoat Renewables.

KKR acquired John Laing late last year in a deal valued at about £2 billion (€2.3bn) that took the formerly listed company off the London Stock Exchange.

The IIF started off in 2012 by buying wind farm assets from Energia Group (then known as Viridian) that would ultimately be sold again. In 2013, it purchased Towercom, with a portfolio of more than 400 telecom towers, from clients of Goodbody Stockbrokers.

Two years later, the fund acquired a licence to operate the Convention Centre Dublin until 2035 from the receivers of Treasury Holdings. The Liffey-side conference centre building is owned by the Government through the Office of Public Works (OPW).

In 2017, the IIF moved to acquire control of Enet, which operates fibre optic infrastructure known as the metropolitan area networks on behalf of the State in 94 towns and cities.

That same year, the fund set up Valley Healthcare. That business currently has 20 operating healthcare centres, with a further six in development.

[ State-backed infrastructure fund set to see €1bn portfolio broken up ]

AMP Capital and leading IIF investors began to weigh the long-term future of the fund three years ago, sources previously said, with options including raising more money to continue to invest even amid heightened competition for assets from overseas investment funds, or a sale of the portfolio.

While a formal decision to sell was only made earlier this year, there was a general consensus by the end of 2020 that this would be the outcome, they said. However, the review also occurred against the backdrop of the fallout from revelations in 2020 that Boe Pahari, who was hired a decade earlier to head AMP Capital’s European infrastructure business and led some of the early IIF deals, had been promoted as head AMP Capital even though the wider AMP Group knew he had settled a sexual harassment claim brought by a woman colleague. Mr Pahari left AMP Capital in April 2021. However, the episode had already prompted disquiet among some investors in the IIF, including ISIF, which told online publisher the Currency in August 2020 that it had “raised its concerns about these matters with AMP Capital, and discussed them with Irish Life and shareholder advisory groups”.