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John Laing backed infrastructure fund targets £174m launch

A new environmental fund backed by investment firm John Laing has revealed plans to float on the London Stock Exchange, eyeing ‘significant’ opportunities including the waste sector.

John Laing Environmental Asset Group (JLEN) will acquire 16 environmental infrastructure assets part of John Laing’s portfolio.

They include waste management projects, such as private finance initiative (PFI) contracts for municipal waste processing at Dumfries and Galloway in Scotland and the East London Waste Authority.

Shanks sold its equity share in those contracts to John Laing in 2010.

Mark Wilson, partner at Catalyst Corporate Finance, told MRW: “It is positive to see them lead the way in this relatively new asset class for public markets – environmental infrastructure. I would expect more funds to follow this lead.

“Given John Laing’s track record, it would appear that the waste industry should be in line to benefit from their investment funds.”

However, he noted the fund would most likely invest in well-establish processing or treatment technologies underpinned by long-term contracts with predictable cash flows.

JLEN’s portfolio also includes a range of offshore wind projects and solar photovoltaic plants.

Adrian Ewer, chief executive at John Laing, said: “John Laing has responded to the Government’s increase in focus on economic infrastructure by developing its portfolio of assets in the environmental infrastructure sector.

“We have developed these assets so that they are at the stage at which they are now attractive to investors seeking robust and sustainable yields.”

Ewer added the firm saw “significant prospects ahead” to acquire other environmental assets in the UK and abroad.

John Laing will be a cornerstone investor in JLEN’s initial public offering, subscribing for 24.9% of shares.

The group intends to raise a minimum of £160m, with the option to increase the size of the issue to about £174m.

JLEN plans to deliver a long-term dividend of 6p per share increasing in line with inflation.

The divestment follows the launch of another infrastructure fund in 2010, the John Laing Infrastructure Fund (JLIF), which has generated shareholder returns of 33%. JLIF invests in low-risk, operational public–private partnership infrastructure projects located in the UK, continental Europe and North America.

 

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