Legal & General has invested £169m from its annuity portfolio in two infrastructure projects, including £70m in care homes and £89m in a hospital development.
The firm said it had completed the acquisition of 13 care homes from Prestbury Investments, for a total consideration of just over £70m. The homes are let to care home provider Methodist Homes.
L&G said it has lowered the current rents for the care homes by providing Methodist Homes with long-term stable financing, with leases that have annual RPI-linked rent reviews, creating stability and certainty.
In addition, L&G has invested £89m over a 32-year term, as part of a consortium to build the new Royal Liverpool University Hospital for £335m.
Both investments are from the L&G annuity portfolio, matching long-term assets to liabilities, and will be used to pay customers’ pension annuities.
The firm said infrastructure provides an excellent match for its long-term liabilities, matching annuities with UK infrastructure increases the returns on its funds, and helps it to continue to offer competitive annuity pricing, and investment in UK infrastructure projects drives UK economic growth, and creates roads, schools, and hospitals which benefit the UK population.
Legal & General Capital managing director Paul Stanworth said: “Legal & General is committed to investing in the fabric of the UK. There is a chronic shortage of housing in the UK, and we want to help to address this problem. This is our first investment into providing care homes for the elderly, we have already invested over £750m in student accommodation, have part acquired CALA Homes, and plan to move into homes to rent.
“A better infrastructure also includes better healthcare, and the new Royal Liverpool will help improve quality of life in the city and contribute to economic growth in the North West.”
Methodist Homes chief executive Roger Davies said: “It is great to see Legal & General Property investing in our sector and in MHA particularly. We foresee a growing need of a range of accommodation, support and care services for Britain’s older people and are committed to playing a full part in meeting this need. LGP and MHA share a long-term commitment and a strong values-base and we look forward to a long and successful relationship.”
Royal Liverpool and Broadgreen University Hospitals Trust chief executive Aidan Kehoe added: “This is a huge moment for all those who have worked so hard, for so many years and we are all delighted to have achieved financial close on the new Royal. This is fantastic news for our patients, our staff and the city of Liverpool. We will have a world class hospital facility designed to provide a whole new approach to healthcare and help us to tackle some of our region’s biggest health issues.”
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