South Koreans to take 12% stake in Gatwick Airport
2.2.2010 (Financial Times)
By Christian Oliver in Seoul
South Korea’s National Pension Service, the world’s fifth biggest pension fund,
will next week take a 12% stake in Gatwick airport, stressing that investment
in Britain will play a significant role in quadrupling its international exposure.
The NPS, which is aiming to expand its overall portfolio from $240bn to $400bn
by 2014, came to the attention of Britain’s financial community last year when
it bought the headquarters of HSBC in Canary Wharf for £773m ($1.2bn) in cash.
Jun Kwang-woo, NPS chairman, who is spearheading a sweeping international expansion,
said the fund would look to lift its exposure to Britain from the current 1.3
per cent.
“Some infrastructure-related investment ahead of the London Olympics in 2012
could be very interesting and that could generate some momentum. The regulatory
framework is very stable and reliable,” Mr Jun said.
Gatwick airport was sold late last year to Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51bn.
Mr Jun said that taking a 12% equity stake in the airport represented an investment
of a little less than £100m.
GIP said the group was pleased to have NPS as a long-term relationship investor,
adding that the deal was part of plans that had been disclosed on completion of
the purchase of Gatwick to sell a minority interest in the airport in its portfolio
management. GIP will retain a controlling stake, the company said.
The Gatwick deal is being financed with bank debt accounting for 45% of the purchase
price.
“We are part of a consortium,” Mr Jun said. “In our investment strategy, for
the time being and foreseeable future, we will look for possibilities to join
forces with big international players. This is an opportunity for big financial
players.”
More broadly, he argued that UK property continued to be attractive: “Our general
attitude is that we consider that investment in the United Kingdom represents
a good buying opportunity. If you look at the property market around the world,
according to our analysis, Great Britain has already undergone quite a substantial
correction, more substantial than many other places around the globe. It could
go down further but given the correction that it has already gone through, this
could be a good time for us.”
The NPS is scouting for prime office property across the world and earlier this
year bought the mixed-use Aurora Place in Sydney’s business district.
The fund is also targeting an aggressive expansion into equities, which will
give it a greater role in enforcing corporate governance in South Korea.
EDITOR’S CHOICE
see also
Times
2.2.2010
Koreans swoop on Gatwick stake
by Robin Pagnamenta
South Korea’s National Pension Service is in talks to acquire a 12% stake in
Britain’s Gatwick airport.
The NPS, the world’s fifth-largest pension fund, is close to acquiring the stake
from Global Infrastructure Partners, an investment fund, which bought the airport
from BAA late last year.
According to reports last night, the NPS could complete the transaction, worth
about £100 million, as early as next week.
Gatwick is Europe’s eighth-busiest airport measured by traffic, handling 34 million
passengers in 2008.
The NPS fund is keen to bolster its investments in Britain as part of a drive
to quadruple its international investments.
The NPS, which has stated a preference for UK assets because of the stable regulatory
environment, is aiming to boost its overall holdings from $240 billion (£150 billion)
to $400 billion by 2014.
Last year, the group first gained international attention when it acquired the
headquarters of HSBC, the banking group, in Canary Wharf for £773 million.
The NPS is thought to be considering further property acquisitions in the UK.
Gatwick was sold by BAA for £1.5 billion to Global Infrastructure Partners, a
fund backed by General Electric and Credit Suisse, which already owns London City
airport. The airport was sold amid criticism that BAA had a monopoly grip on Britain’s
airports.
GIP took full control of Gatwick less than two months ago — on December 4. Bank
finance supplied 45 per cent of the purchase price.
A spokeswoman for Gatwick declined to comment last night.
In a recent interview, the new head of Gatwick said that the airport was gearing
up to poach customers from its rivals Heathrow and Stansted, in a sign of increased
competition between the country’s three biggest airports.
(2nd February 2010)
