Allianz is investing in progress across many different sectors such as infrastructure, services and sewage disposal projects. Porterbrook, the Colchester Garrison and the Tideway Tunnel are three examples of traditional projects and how they are going to be improved in the future.
1. Porterbrook: Allianz carries you to the heart of London
The UK railway system , which was built over 200 years ago, is the oldest in the world. And even though the UK ranks only 23rd in terms of population, with approximately 1.6 billion journeys each year, it is the fifth most used in the world.
Apparently, the British like to travel by train. It should come as no surprise then that this is an interesting market for sophisticated investors.
In 2014, Allianz Capital Partners (ACP) acquired Porterbrook Rail Finance Limited, one of the three major rolling stock leasing companies in the UK. The acquisition was made together with three other international financial investors: one from Australia (Hastings), one from Canada (AIMCo) and one from France (EDF Invest).
Porterbrook owns and manages a modern fleet of more than 5,000 passenger and freight rolling stock, which it leases to train- and freight-operating companies in the UK under long-term lease agreements.
This fleet represents approximately one third of the UK's passenger rolling stock and Porterbrook is on course to further expand. Recently, the company agreed to purchase 108 new trains, which will be used on the Gatwick Express airport shuttle to London's Victoria station from 2016 onwards.
Due to their long asset lives, underlying long-term leases and corresponding revenue stability, investments in rolling stock are an ideal match for the requirements of Allianz insurance companies with long-term liabilities.
2. Colchester Garrison: An unusual partnership
The Colchester Garrison in Essex, England has a long history, which dates back to the Roman era. In the beginning of 2015, Allianz became part of this history. The project includes the funding, construction and operation of the Colchester Garrison over the course of 35 years starting in 2004.
Today, the facilities offer social and educational services to over 3,500 military and 700 civil servants. Allianz became the majority shareholder of the garrison when it acquired 56 percent of the project from InfraRed Capital Partners. Allianz invested alongside the British Pensions Infrastructure Platform PPP Equity Fund, which is administered by Dalmore Capital.
Home base of the 2nd Battalion and 3rd Battalion of the Parachute Regiment, the Colchester Garrison plays an important role for the British military. This PPP is part of a broader initiative to ensure the long-term maintenance of key infrastructure assets in the UK.
As with any PPP, there should be a benefit to both the private and public sectors. Due to the long asset life and underlying revenue stability the UK Government offers, the Colchester Garrison is an ideal match for the Allianz investment portfolio. The public benefits from superior service and the reliable operation of the garrison.
3. Tideway Tunnel: Allianz invests in a cleaner River Thames
While still in good condition, London's Victorian sewers no longer have the capacity to meet the demands of London today. Designed in the 1850s for four million people, the conditions for London's sewage system have changed vastly: rising water consumption per capita, diminished green space to soak up rainfall and a growing population of currently eight million inhabitants. As a result, overflows are regular, resulting in tens of millions of tons of untreated sewage flowing into the River Thames.
To solve this environmental problem, a major new sewer will be built: the Tideway Tunnel, a 25 kilometer-long interception, storage and transfer tunnel project. Running at a depth of 30-65 meters beneath the river bed, the tunnel will essentially improve London's environment, appearance and public health.
Allianz will contribute to financing and delivering this landmark infrastructure, which is so vital to Londoners and which is amongst the largest infrastructure projects in the UK over the next decade.
Allianz will invest in the project via the newly-created company Bazalgette Tunnel Limited as part of a consortium of other infrastructure investors Amber Infrastructure Group, Dalmore Capital Limited and Dutch Infrastructure Fund. Bazalgette Tunnel will be regulated by the UK water regulator Ofwat.
The investment marks Allianz Capital Partners' first investment in the regulated UK water sector. Once completed, Tideway Tunnel will be amongst the largest companies in the regulated UK water sector.
Further information
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