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1 March 2014

USS invests £143m in NATS

Universities Superannuation Scheme Limited (“USS”), one of the largest pension schemes in the United Kingdom, representing academics and related support staff in the higher education sector, today announced that it will acquire a 49.9% non-controlling stake in The Airline Group Limited (“Airline Group”).

The Airline Group is a 41.9% shareholder in NATS Holdings Limited, the holding company for NATS which is a world leader in the provision of air traffic management, including ensuring the safety of aircraft flying in UK airspace and over the eastern North Atlantic. Completion of the transaction remains subject to clearance from the European Commission.

The transaction was arranged by USS Investment Management Ltd, a wholly owned subsidiary of USS and its principal investment manager and advisor, which will manage the investment on USS’s behalf. The investment will be managed by USS Investment Management Ltd’s infrastructure team which substantially reduces the overall cost to USS of investing in infrastructure. As a UK pension fund with a long-term commitment to provide high quality pensions for the higher education sector, USS finds UK infrastructure attractive for its members as it can provide inflation-linked, steady cash flows over a long time horizon, which match USS’s long-term liabilities.

Mike Powell, Head of Private Markets, USS Investment Management Ltd said: “This is another significant investment for the scheme and its members in a high quality infrastructure company. 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.”

NATS is the UK's leading provider of air traffic control services operating since 1962 (originally NATCS). Last year the company handled 2.1 million flights, carrying some 220 million passengers in the UK, which has some of the most complex airspace in the world. This depth of experience, combined with innovation that has driven significant performance improvements over the past decade has led to NATS providing services to 15 UK airports and in more than 30 countries around the world spanning Europe, the Middle East, Asia and America.

Gavin Merchant, Senior Investment Manager, Infrastructure, USS Investment Management Ltd 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.”