UK infrastructure loses its shine
0The UK has lost its appeal to global infrastructure investors, according to a report in today’s Financial Times “Infrastructure investors put ‘blanket ban’ on UK assets”.
The article reports investors as saying that they are steering clear of the country due to an unsympathetic political background and tighter regulation, which has led to a number of deals being pulled or delayed.
These include the sale by DWS and Corsair Capital of their stakes in Yorkshire Water.
The next five-year regulatory period for water is due to begin in April this year, with Ofwat, the regulator, signalling the new regime will be tough.
In addition, in the Autumn statement the government decided to end the use in future deals of the private finance initiative.
LGPS funds have been encouraged to move into infrastructure in order to diversify and attain some ‘decorrelation’ with equity and fixed income returns.
The FT’s article indicates that the pickings available from doing this in the home market have become meagre.
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