(MENAFN- Arab Times) One of the world's biggest sovereign wealth funds is part of a consortium that is plotting a bid for London City Airport, which has been valued at £2bn, says an article in the Telegraph.
Wren House Infrastructure Management, which is an investment vehicle owned by the Kuwait Investment Authority; Canadian giant Ontario Teachers' Pension Plan; and investment firm Hermes have teamed-up to make an offer for the airport, according to sources in the infrastructure sector. The KIA is the world's fifth largest sovereign wealth fund with some $592bn in assets.
The trio will come up against a group led by the infrastructure arm of Australian financial group Macquarie, which is also understood to be preparing a rival approach for London City. Suitors are scrambling to position themselves for a bidding war after private equity house Global Infrastructure Partners revealed earlier this month that it had put the airport up for sale. GIP, which owns 75pc of London City as well as Gatwick and Edinburgh airports, bought the airport nine years ago for around £750m. It is thought that a sale could fetch up to £2bn. Earlier this week it emerged that GIP had hired Credit Suisse to handle the disposal of London City.
Oaktree Capital owns the remaining 25pc of the airport and has agreed to the sale. London-based Wren House was set up in 2013 to facilitate direct infrastructure investment by Kuwait's sovereign wealth fund. Kuwait was part of a consortium that unsuccessfully attempted a £5bn takeover of water utility Severn Trent two years ago. OTPP, which manages about C$154.5bn in assets, is one of Canada's largest investment houses and is a major player in British infrastructure.
It took sole ownership of Bristol Airport last September, holds a stake in Birmingham Airport, and, along with fellow Canadian pension fund Borealis Infrastructure, owns High Speed 1, the company behind the rail link between London St Pancras and the Channel Tunnel. Hermes is also a key investor in the infrastructure sector and, together with the Canada Pension Plan Investment Board, bought a 30pc stake in Associated British Ports for about £1.6bn earlier this year.
Macquarie Infrastructure and Real Assets, which is planning its own consortium bid, was bought out of Bristol Airport by OTPP. London City is close to Canary Wharf and is a popular airport for workers in the financial services sector. It expects to carry about 4.1m passengers this year, up from 3.7m in 2013 and 2.8m in 2010. The airport is targeting 6m passengers a year by 2023.
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