The Universities Superannuation Scheme Limited (“USS”), one of the largest pension schemes in the United Kingdom, representing academic and related staff in the higher education sector, today announced that it will invest £392m in the UK’s largest airport on 24 October 2013. USS has reached an unconditional agreement with Ferrovial to acquire 8.65% of FGP Topco Limited, the holding company which owns Heathrow Airport Holdings Limited.
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 form part of USS’s infrastructure portfolio and is its largest investment in UK infrastructure to date. 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.
Roger Gray, Chief Executive Officer, USS Investment Management Ltd said: “This is a significant investment for the scheme and its members in a premier UK infrastructure asset. We believe that investment in UK infrastructure is a win-win; promoting economic growth and jobs whilst providing attractive investments for the trustee board in meeting its commitments to members. This transaction represents a long term investment by USS in the future of London and the UK.”
Heathrow Airport is a national asset of key strategic importance. The airport has been redeveloped significantly over the last 10 years to become a leading European airport, and the airport of choice for passengers, businesses and airlines. Terminal 5 has been voted the best terminal in the world over the last two years and Terminal 2 is expected to be opened next year.
Michael Powell, Head of Private Markets, USS Investment Management Ltd said: “While the Civil Aviation Authority’s final Q6 regulatory proposals are very challenging, USS is investing for the long term. We have confidence that the right incentives will be set in place to encourage the investment that Heathrow and the UK needs. Heathrow Airport has a bright future as the UK’s only hub airport and we look forward to the outcome of the Davies Commission.”