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L&G plans to invest £15bn in UK infrastructure

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Legal & General is planning to invest up to £15bn of its investment funds into UK infrastructure over the next decade.

In an interview with The Sunday Telegraph, L&G chief executive Nigel Wilson said as banks pull back from infrastructure investment insurers will look to fill the gap.

He said: “We have got about £3bn of investment in infrastructure in the UK, but we probably have up to £15bn to put into UK infrastructure and direct investment from L&G’s annuities portfolio.

“In the next 10 years it will be the insurers and pension funds that will be funding UK infrastructure investments, rather than the banks.”

Wilson has rejected possible investment in the High Speed 2 rail link between London and the North, arguing it delivers “little economic benefit” for the £43bn it is costing.

Instead, he favours investing in housebuilding and regional development. L&G has already invested £500m into student accommodation, and taken a 46 per cent stake in housebuilder Cala Group.

The insurer has also invested in the St George’s Park National Football Centre at Burton Upon Trent.

Wilson told the newspaper: “If there is capital available, you would be thinking of spending it on building more homes rather than spending £43bn on rail when there is a desperate shortage of housing.

“If we want to develop the regions then let’s develop regional plans. Just building a slightly improved rail service will not necessarily do that.

L&G will post its half-year results tomorrow, when it is expected to post a rise in operating profits from £518m to £582m.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. So where is the L&G Infrastructure fund to rival that of First State?

  2. Yet they all but closed their uk IFA sales division last year as it was not profitable enough!

  3. Felix, I believe L&G aren’t looking to buy into companies in the infrastructure sector, which is all the FS fund does, and certainly not on a global scale. They are looking to invest directly into the infrastructure in the UK, effectively replacing what would have previously been government driven projects.

    Anonymous…Errr?… How does the closing of their “IFA sales division” ( is that what they did?) relate to this story? That’s like asking why a football team gives away one player and spends money on another, it’s just strategy. Perhaps they think their IFA division was Andy Carroll and their Infrastructure business was Gareth Bale?

    (Sorry, it was the first weekend of the real football season this weekend, so analogies abound..)

  4. Err @ James , I was contrasting L&G ‘s massive spend on infrastructure , which may or may not benefit the economy , with their drastic cuts in their support for the clients who have supported them for decades via advisers . All rather ironic that their strategy of spending billions to support the state sector whist they could not spend a few million supporting IFA’s anymore !

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