South Korea’s National Pension Service is to take a 12 per cent stake in Gatwick airport, worth about £100 million. The deal could be completed as early as next week and comes as part of a sweeping international expansion programme by the world’s fifth biggest pension fund.
Last year NPS bought the headquarters of HSBC in Canary Wharf for £773m in cash. The group says it aims to expand its overall portfolio from $240bn to $400bn by 2014.
Jun Kwang-woo, NPS chairman, said the fund is hoping to raise its investment in Britain, which currently only make up 1.3 per cent of its portfolio.
“Some infrastructure-related investment ahead of the London Olympics in 2012 could be very interesting and that could generate some momentum. The regulatory framework is very stable and reliable,” Mr Jun said.
Gatwick is Europe’s eighth-busiest airport measured by traffic, handling 34 million passengers in 2008.
It was bought last November by Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51bn. Bank finance supplied 45 per cent of the purchase price.
GIP said the group was pleased to have NPS as a long-term relationship investor, adding that the deal was part of plans that had been disclosed on completion of the purchase of Gatwick to sell a minority interest in the airport in its portfolio management. GIP will retain a controlling stake, the company said.
“We are part of a consortium,” Mr Jun said. “In our investment strategy, for the time being and foreseeable future, we will look for possibilities to join forces with big international players. This is an opportunity for big financial players.”
More broadly, he argued that UK property continued to be attractive: “Our general attitude is that we consider that investment in the United Kingdom represents a good buying opportunity. If you look at the property market around the world, according to our analysis, Great Britain has already undergone quite a substantial correction, more substantial than many other places around the globe. It could go down further but given the correction that it has already gone through, this could be a good time for us.”