News Roundup: PFI investor compensation ‘subject to review’, LGPS funds make acquisition, council tax take
0McDonnell says PFI investor compensation ‘subject to review’
Shadow chancellor John McDonnell has hinted that, under a Labour government, investors might not receive compensation if private finance initiative (PFI) contracts are taken back in-house by the public sector. McDonnell told the Financial Times that levels of compensation would depend on a review. An FT editorial said: “If it wishes to change the law in order to break PFI contracts, it would set a worrying precedent. The UK is highly reliant on foreign investment. Confidence in its legal system is vital. Any government must ensure that investors feel welcome and trust the rule of law. Breaking contracts risks significant reputational damage.”
LGPS funds back private rented sector investment
A private rented sector investment vehicle backed by five LGPS funds has made its first acquisition. The Hearthstone Residential Fund 1 is acquiring a portfolio of 171 homes in Manchester, Birmingham and Nottingham for £24m. At first close, the fund received commitments of £100m from investors including the Derbyshire Pension Fund, Nottinghamshire Local Government Pension Fund, Staffordshire Pension Fund, Teesside Pension Fund and West Midlands Pension Fund.
Housing and infrastructure investment platform launches
LGPS schemes are among the investors in a new infrastructure and housing investment platform launched by Gresham House. The fund has announced its first investment will be to finance 30MW of operational grid-scale energy storage assets in Nottinghamshire, Bristol and Essex. The fund held a first close in 2017 with £150m of commitments raised from institutional investors including LGPS funds.
London CIV to launch investment oversight platform
London CIV is seeking a partner to implement an investment oversight platform. The LGPS pool has launched a tender that says the tool “will provide the core capabilities necessary to deliver its value proposition effectively”. The tender specifies that the platform will facilitate manager selection, investment manager oversight, fund rebalancing and scenario analysis, managing or overseeing associated operational processes including risk, performance measurement, and asset life cycle processes.
Councils reap £7.8bn in council tax
The third quarter council tax take by councils reached £7.8bn, according to figures from the MHCLG. The figure is up from £7.4bn collected in the third quarter last year. Birmingham City Council collected the largest sum during the quarter at £97m.
Shopping centre acquisition
Canterbury City Council has taken full control of the Whitefriars shopping centre in its city centre. The £75m deal sees the authority acquire the full freehold and leaseholds. In June 2016, the council bought a 50% stake in Whitefriars and was given first refusal to buy the remaining 50%. Council leader Simon Cook, said: “We thought very carefully about this once-in-a-generation opportunity to take control of one of the city’s key assets, which could just as easily have been bought by investors whose interests do not necessarily align with those of the district.”
