21st Jan 2014 12:52
LONDON (Alliance News) - John Laing Infrastructure Fund Ltd Tuesday called for an extraordinary general meeting of its shareholders as it proposed a number of changes to its investment policy - as well as to its first offer agreement with John Laing PLC - in a move that would allow it more flexibility in the way it invests its funds.
The company wants to hold the extraordinary general meeting on February 7, it said.
In a statement, John Laing Infrastructure Fund said it wants to increase the limit on investment capital in projects under construction to 30% of the total assets of the fund. John Laing Infrastructure Fund says the current 15% limit recently prevented it from investing in a significant portfolio of "high quality, low risk assets" because the proportion of those assets in the later stages of construction exceeded the current limit.
The investment policy proposals also include a provision to allow the to acquire infrastructure assets, comprising up to 10% of total assets, that aren't government-backed public private partnerships assets but have more-or-less the same risk profile and characteristics as them.
It said the proposed changes to its first offer agreement with John Laing PLC would allow it to source a larger pool of assets, including rail assets, such as the InterCity Express Project in the UK. John Laing Infrastructure Fund also said it wants to amend the first offer agreement to exclude waste assets, which would result in a net increase in the pipeline from John Laing PLC of about GBP115 million over the next six years.
"Our announcement this morning marks another exciting step. While we remain confident of asset flow in the near future, the proposed changes to our pipeline and investment policy will ensure John Laing Infrastructure Fund is best positioned to continue to capture carefully selected opportunities, and will provide greater optionality and flexibility in investment decisions," Paul Lester, Chairman, said in a statement.
He said the changes would help John Laing Infrastructure Fund to capitalise on "evolving changes" taking place in the infrastructure market, meaning the fund wouldn't miss out on certain opportunities as a result of its investment policy.
John Laing Infrastructure Fund said it has been working with its investment adviser - which is owned by John Laing PLC - on its longer-term strategy with a particular focus on the supply of future infrastructure assets to acquire.
John Laing Infrastructure Fund highlighted the UK government's Private Finance 2 approach to public private partnerships as one of the "evolving changes" in the global infrastructure market that could cause it to miss out on investment opportunities under the fund's current policy.
"The new terms and conditions [of Private Finance 2] for appropriate infrastructure assets might not be strictly eligible under the current definition of public private partnerships projects in [John Laing's] investment policy.
Private Finance 2 was ushered in by the Government in December 2012, replacing the Private Finance Initiative, which had been criticised for being too "generous" to the private sector.
In addition, John Laing Infrastructure Fund said its current pipeline of projects that fit the criteria within the First Offer Agreement with John Laing is limited over the next three years and tailing off thereafter.
If the proposals are approved, the company expects that its pipeline with John Laing PLC, for those assets which John Laing owns, will be about GBP400 million over the next six years.
John Laing Investments Limited, a subsidiary of John Laing PLC, also owns 4.5% of John Laing Infrastructure Fund's share capital in issue.
John Laing Infrastructure shares were Tuesday quoted at 116.00 pence, down 0.50 pence, or 0.4%.
By Samuel Agini; [email protected]; @samuelagini
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