The John Laing Group has published the prospectus of its infrastructure fund.
With a seed portfolio of £259.9m, the John Laing Infrastructure fund would be the second largest this year after Anthony Bolton’s Fidelity China Special Situations fund.
The company targets a yearly yield of 6%, an internal rate of return ranging between 7% and 8%, and dividend payments of 6% per year.
Chaired by Paul Lester, the Guernsey-incorporated, closed-ended investment company will invest in equity and subordinated debt issued in respect of infrastructure. This includes private finance initiative and public private partnerships. (article continues below)
So far, the company has agreed to acquire a seed portfolio consisting of investment capital in 19 projects.
Located in Britain, Canada and Finland, the projects operate in various sectors, including health, schools, justice, emergency services, roads, regeneration, defence and street lighting.
The seed portfolio is valued at £259.9m. The target is £259m.
The company limits investment capital in projects that are under construction to 15% and intends to make prudent use of leverage, which will exclude senior debt in place at project entity level and will be limited to 25% of the company’s total assets.
The company will also have the ability to undertake currency and interest rate hedging in order to manage the portfolio efficiently. It will also have a discount control mechanism to manage any discount to the net asset value at which ordinary shares may trade.
The John Laing Infrastructure investment trust plans to apply to be admitted to the Official List with a premium listing. In addition, it will apply to the London Stock Exchange (LSE) for its ordinary shares to be traded on the LSE’s main market for listed securities.
The company will make its investments via a group structure involving two Luxembourg-domiciled investment companies and an English limited partnership.
John Laing Capital Management, a wholly owned subsidary of John Laing, acts as the investment adviser.