The £40bn Universities Superannuation Scheme (USS) has bolstered its infrastructure portfolio through the acquisition of a 49.9% non-controlling stake in The Airline Group.
The Airline Group is a 41.9% shareholder in NATS Holdings, the UK’s leading provider of air traffic control services (NATS). Last year NATS handled 2.1 million flights carrying some 220 million passengers in the UK, which has some of the most complex airspace in the world. Over the past decade it has provided services to 15 UK airports and in more than 30 countries around the world spanning Europe, the Middle East, Asia and America.
The transaction was arranged by the pension fund’s asset management subsidiary and its principal investment manager and adviser, USS Investment Management (USSIM).
USSIM head of private markets Mike Powell said the investment would be managed by USSIM’s infrastructure team, which substantially reduces the overall cost to USS of investing in infrastructure.
“This is another significant investment for the scheme and its members in a high quality infrastructure company,” added Powell.
“The growth of our infrastructure portfolio by our in house team is a compelling model for the trustee board in meeting its long term commitments to members.”
USSIM senior investment manager, infrastructure, Gavin Merchant said: “NATS is the global leader in air traffic control and is a strong example of where private and public ownership has worked together to build a national asset of strategic importance. NATS is well positioned to maintain its high level of safety performance and to drive operational improvement through innovation. We look forward to working with the existing shareholders and the management team in delivering these objectives.”
USS said it finds UK infrastructure attractive for its members as it can provide inflation-linked, steady cash flows over a long time horizon, which matches its long-term liabilities.
Completion of the transaction remains subject to clearance from the European Commission.
This comes just weeks after USS invested £392m in Heathrow Airport by reaching an unconditional agreement with Ferrovial to acquire 8.65% of FGP Topco, the holding company which owns Heathrow Airport Holdings.
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