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Real AssetsInvesting for a positive change
2018 Legal & General Investment Management Real Assets - Corporate Profile
DP World, London Gateway Port
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ContentsInvesting for positive change 4
Adding value through partnerships 6
Building homes for Britain 8
Focused on long-term needs 10
Real estate 12
Infrastructure 14
Corporate debt 16
Breaking new ground in the US 18“ Our forward-looking business combines depth of knowledge and innovative ideas to create outstanding investment solutions that serve the long-term needs of clients, businesses and communities across the globe.”
Bill Hughes, Head of LGIM Real Assets
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Investing for positive changeLGIM Real Assets is part of Legal & General Investment
Management (LGIM) – the investment arm of Legal
& General Group, one of the biggest insurance and
financial management companies in the world.
We are trusted to invest £27.0 billion*, making us one
of the UK’s largest real asset managers in real estate,
infrastructure and corporate debt.
50 years of experience has led to unrivalled expertise,
enduring relationships and one of the most extensive
networks in the industry. It also means we can identify
and access some of the best market deals.
In other words, we take a long-term view and use our
size and influence to bring about positive change and
create sustainable investor value.
And not only do we seek to help clients meet their
investment needs but we do so while having a positive
impact on society and the environment.
It’s a dynamic combination that’s led to consistent
growth. Now, with the increasing crossover in the
real assets space, we’ve broadened our investment
capabilities accordingly.
It doesn’t stop there. We’re expanding internationally,
applying our skills and knowledge across Europe, the
US and Australia.
* As at 31 December 2017
The Walney Extension. We provided over £300m of long-term acquisition debt to support the development of the world’s largest offshore wind farm.
The Beacon, Eastbourne. £220 million retail and leisure town centre regeneration.
Newcastle Helix. £350 million city centre development, boosting local jobs and driving economic growth.
£27.0 billion*
invested in real estate, infrastructure and corporate debt.
50 Yearsindustry experience.
Globalexpansion across Europe, the US and Australia.
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2018 Corporate Profile
The Lexicon, Bracknell. £240 million joint venture redevelopment of Bracknell town centre, one of the largest urban regeneration projects in the UK.
Investing for now and the future
As part of LGIM, one of the world’s leading investment
companies, we use our scale and influence to invest
responsibly, considering the social, economic and
environmental impact of our decisions. We understand
that occupiers need exceptional buildings to work and
live in; that local communities want environments that
contribute positively to everyday life; and that
companies require competitive financing to be able to
generate jobs.
Expertise focused on getting the best outcomes for our partners
Investing in real assets can be complex, and requires a
far broader and deeper pool of resources than for more
liquid investments. Our dedicated real assets
investment professionals have the expertise to add
value at all stages of a transaction – from origination
and deal structuring to investment and asset
management – and the experience to deliver across the
entire market cycle.
Success in the real assets world requires more than managing the assets. It needs strong
relationships, founded in trust and a shared ethos. Only then can we understand the complex
needs of all our partners. This requires hard work and flexibility, and is rewarded through
investments that deliver the outcomes our partners’ need, be they occupiers, consumers,
companies or investors.
Adding value through partnerships
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The Slate Yard, Salford. Our first build-to-rent scheme comprises 225 apartments designed to meet the bespoke demands of the rental market.
2018 Corporate Profile
Building homes for BritainBuild-to-Rent schemes play an essential role in helping
to solve the UK’s chronic housing shortage. Our first
such scheme, The Slate Yard in Salford, North-West
England provided 225 apartments, designed
specifically for the rental market. The scheme set a
new standard for Build-to-Rent accommodation,
making renting a choice – not the only option.
The scheme was designed with residents in mind.
We spoke to renters and asked what they wanted
and valued. The result was a variety of unit sizes and
layouts, high quality interiors, attractive amenities,
and onsite management and maintenance.
We knew that location was also important, so the
site was close to the heart of Manchester with
good transport links for easy commuting.
Given that there is no single demographic for
Build-to-Rent, it follows that one size does not fit
all. We worked to create living environments that
could adapt accordingly, from flexible contracts
to policies that encourage tenants to make their
home their own. Solar panels were also installed
to reduce the long-term running costs of
communal spaces.
Case Study
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One Central Square, Cardiff. Joint venture partnership to fund the £400m development of over 1.2m sq ft of mixed use accommodation creating space for 10,000 jobs.
2018 Corporate Profile
Focused on the long-term needs of clients, businesses and communities
Our investment capabilities encompass real estate, infrastructure and corporate debt. Sharing our knowledge across these areas enables us to develop deeper insights of markets and trends, and helps us to align the needs of our partners.
We offer diverse equity and debt solutions that cater to the needs of every type of investor, with varying risk profiles and sector focus. All are united by one underlying principle: to meet investors’ demands for long-term assets and enhanced income, while having a positive impact on society and the environment.
We offer our clients a range of pooled funds, both open- and closed-ended, that provide access to the broad market with differing investment objectives. We also offer funds with a specialist sector focus, ranging from leisure parks to industrial estates and urban regeneration.
We’ve over 30 years’ experience of running segregated mandates. Drawing on our deep insights of the real assets sector, we create bespoke investment solutions that meet our clients’ individual needs.
We run several joint ventures with like-minded partners who share our long-term investment ambitions. These partnerships tend to be focused on specific real estate or infrastructure deals where greater control and alignment of interest is required due to the complexity of the transaction.
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We manage over
£22.1 billion*
in Real Estate Equity and Debt.
245 Hammersmith Road, London. £275 million office joint venture, to develop a new, flexible and collaborative working environment.
* As at 31 December 2017
Legal & General Investment Management, Real Assets 2018 Corporate Profile
Real estateWe’re one of the UK’s most active real estate managers.
Clients have trusted us to invest their capital in real
estate for almost 50 years. During that time, we’ve built
a strong network of industry relationships. This gives
us excellent access to deals, be it debt or equity.
Our experience enables us to add value across the
entire market cycle, based on expert teams who are
able to get the most out of each property. Our scale
also sets us apart since it provides the depth of resource
to specialise in individual sectors. This detailed focus
on occupier and investment dynamics generates
valuable insights that inform asset management plans
and add value to our investment process.
We understand that clients’ needs can change over time.
Our proven track record of innovation includes solutions
designed to meet those evolving requirements.
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InfrastructureSince our debut infrastructure deal in 2012, we’ve
become active investors in all key social and economic
infrastructure sectors, managing £3.0 billion* of assets
in the UK, across Europe, the US and Australia. This
evolution in our investment capabilities, which
continues to broaden, recognises clients’ growing
demands for alternative sources of high quality income
and long-term cash flows.
Infrastructure transactions are often complex to
arrange and require a long-term commitment,
potentially for several decades. We understand that
borrowers need a reliable partner, and seek to form
strong relationships, founded on trust, shared ethos
with a desire to have a positive social and economic
impact on communities.
We seek to have an early involvement in potential deals
to optimise the structure of the transaction, negotiating
covenants to protect the security of income.
Our approach is underpinned by robust in-house credit
analysis to ensure we understand and manage
associated risks.
We manage over
£3.0 billion*
of Infrastructure Debt.
High Speed Rail 1. In 2017 we provided £120 million of fixed rate debt to support the successful 2017 acquisition of the UK’s sole high speed rail link.
* As at 31 December 2017
2018 Corporate Profile
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Corporate debtWe lend to investment grade corporate and public
sector entities, working with borrowers to complement
or extend debt finance from banks. Since entering the
market in 2016, we have completed £900 million* of
transactions in the UK, across Europe, the US and
Australia.
As long-term lenders to a business, we are stakeholders
in its future success. Therefore, we seek to develop and
build relationships with each of the businesses that we
lend to. Knowing these businesses helps us to
understand any stresses in their business models and
also ensures we are well placed to provide further
support if needed.
In contrast to public markets, many borrowers in the
private markets are not rated. Leveraging our direct
access to management teams, our in-house credit
analysts assign independent ratings that mirror those
issued by external credit rating agencies. This helps us
ensure each deal is structured appropriately and the
level of compensation adequately reflects the risk taken.
We manage over
£1.9 billion*
of Corporate Debt.
Goshawk. We provided £35.5m of long term finance to facilitate the continued growth of this specialist aircraft leasing platform.
* As at 31 December 2017
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Breaking new ground in the USThe difference between alternative real estate,
infrastructure and corporate credit is becoming
less distinct. In part, this reflects the growth of
private / public sector partnerships, as well as the
move by private entities into areas traditionally
provided by the public sector.
The integration of infrastructure and corporate
credit into our Real Assets offering means we can
take a holistic view of any opportunity and can look
at transactions from different perspectives.
When the University of California, Merced, was
looking to expand its campus, we broke new ground
by becoming part of the first educational private/
public sector partnership to take place in the US.
Our strong track record in infrastructure, existing
presence in the US and expertise across real assets
meant we had longevity and the vision that the
University of California needed in a partner.
The financing will help to nearly double the size
of the existing campus, adding new classrooms,
laboratories, student accommodation and amenities
to sustainably enhance student life and further
academic distinction. In addition, it will help one of
the poorest areas in California, creating new jobs
and having a positive impact on the local community.University of California. The first educational sector public-private partnership to take place in the US, our long term financing will help to nearly double the size of the University Campus.
2018 Corporate Profile
Case Study
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CONTACT US
Please contact LGIM Real Assets Solutions Team for more information.
Legal & General Investment Management
One Coleman Street
London EC2R 5AA
+44 (0) 20 3124 2700 lgim.com/realassets [email protected]
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The information has been produced for information and discussion purposes only and it is not intended to constitute advice (investment, legal, tax advice or otherwise). The information should not form the basis of any investment decisions by you and we are not acting as a fiduciary to you. You should consult with your own professional advisors before taking any action based on the information in this presentation as Legal & General does not (to the fullest extent permitted by law) accept any responsibility for any act or omission taken in reliance of the information contained in this presentation. The information sets out the opinions of Legal & General and is not a guarantee of future events or the profitability of any investment product or service.
Please do not circulate this information to any third party without our prior written consent.
Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272.
LGIM Real Assets (Operator) Limited. Registered in England and Wales No. 05522016. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 447041.