£500m vote of confidence in future of M6 Toll
The new owners of the M6 Toll have received a £500 million vote of confidence from a string of investors including the UK's pensions lifeboat.
The Pension Protection Fund is part of a pool of investors backing a £500m investment by the huge Allianz Global Investors (AllianzGI) group in the UK's only pay-as-you-go motorway.
It comes just days after it was revealed the motorway had been bought by Australian investment group IFM.
The M6 Toll has been losing money since it first opened in 2003, weighed down by the £900m cost of construction. But a major refinancing deal in recent years is thought to have put the new owners in a position to make it profitable at long last.
AllianzGI portfolio manager Adrian Jones said: "With the acquisition of a majority controlling stake in M6toll by IFM our clients were able to invest with confidence."
AllianzGI is one of the biggest investment companies in the world, controlling around £440 billion.
Its £500m bond investment in the M6 toll road spans 32 years – the amount of time left on the motorway's concession deal with the UK government.
The investment is on behalf of a large number of Allianz Group companies, as well as third party clients including The Pension Protection Fund (PPF), often referred to as the UK’s ‘pension fund lifeboat’.
Andy Pearson, chief executive of Midland Expressway which runs the toll road, said: “I am delighted that AllianzGI have chosen to make a bond investment in the M6toll and that the Pension Protection Fund is investing alongside them.
"I think that the M6toll is exactly the right sort of asset to meet our investors strategic needs and I Iook forward to a long and valuable relationship with the Allianz Group companies and other investing clients along with and the Pension Protection Fund.”
The deal gives AllianzGI a major stake in the motorway's debt, which it expects to generate a strong return for its investors as the M6 Toll becomes more profitable in the coming years. It also means it will be working with IFM and the toll motorway company on the way the road is run the future.
Adrian Jones said: “We are delighted to have been offered this opportunity to work with M6toll and IFM to bring a successful conclusion to this important acquisition and refinancing deal.
"The M6 toll road, an essential infrastructure asset with a long operating history, represents exactly the sort of asset our clients look to invest in. With the acquisition of a majority controlling stake in M6toll by IFM our clients were able to invest with confidence.
“This transaction is particularly noteworthy for AllianzGI as it represents the culmination of over a year’s work by a large number of our team working from both Paris and London. It is our largest UK investment to date and it completes the investment phase of Fund 1.”