2018 Legal & General Investment Management Real Assets - Corporate Profile Real Assets Investing for a positive change DP World, London Gateway Port
Legal & General Investment Management, Real Assets 2018 Corporate Profile Contents Our forward-looking business combines depth of knowledge and innovative ideas to create outstanding investment solutions that serve the long-term needs of clients, businesses and communities across the globe. Bill Hughes, Head of LGIM Real Assets Investing for positive change 4 Adding value through partnerships 6 Building homes for Britain 8 Focused on long-term needs 10 Real estate 12 Infrastructure 14 Corporate debt 16 Breaking new ground in the US 18 2 3
Legal & General Investment Management, Real Assets 2018 Corporate Profile Investing for positive change The Beacon, Eastbourne. 220 million retail and leisure town centre regeneration. Newcastle Helix. 350 million city centre development, boosting local jobs and driving economic growth. LGIM Real Assets is part of Legal & General Investment Management (LGIM) the investment arm of Legal & General Group, one of the biggest insurance and financial management companies in the world. We are trusted to invest 27.0 billion*, making us one of the UK s largest real asset managers in real estate, infrastructure and corporate debt. 50 years of experience has led to unrivalled expertise, enduring relationships and one of the most extensive networks in the industry. It also means we can identify and access some of the best market deals. In other words, we take a long-term view and use our size and influence to bring about positive change and create sustainable investor value. 27.0 billion * invested in real estate, infrastructure and corporate debt. The Walney Extension. We provided over 300m of long-term acquisition debt to support the development of the world s largest offshore wind farm. And not only do we seek to help clients meet their investment needs but we do so while having a positive impact on society and the environment. It s a dynamic combination that s led to consistent growth. Now, with the increasing crossover in the real assets space, we ve broadened our investment capabilities accordingly. It doesn t stop there. We re expanding internationally, applying our skills and knowledge across Europe, the US and Australia. 50 Years industry experience. Global expansion across Europe, the US and Australia. * As at 31 December 2017 4 5
2018 Corporate Profile Adding value through partnerships The Lexicon, Bracknell. 240 million joint venture redevelopment of Bracknell town centre, one of the largest urban regeneration projects in the UK. Success in the real assets world requires more than managing the assets. It needs strong relationships, founded in trust and a shared ethos. Only then can we understand the complex needs of all our partners. This requires hard work and flexibility, and is rewarded through investments that deliver the outcomes our partners need, be they occupiers, consumers, companies or investors. Investing for now and the future As part of LGIM, one of the world s leading investment companies, we use our scale and influence to invest responsibly, considering the social, economic and environmental impact of our decisions. We understand that occupiers need exceptional buildings to work and live in; that local communities want environments that contribute positively to everyday life; and that companies require competitive financing to be able to generate jobs. Expertise focused on getting the best outcomes for our partners Investing in real assets can be complex, and requires a far broader and deeper pool of resources than for more liquid investments. Our dedicated real assets investment professionals have the expertise to add value at all stages of a transaction from origination and deal structuring to investment and asset management and the experience to deliver across the entire market cycle. 6 7
2018 Corporate Profile The Slate Yard, Salford. Our first build-to-rent scheme comprises 225 apartments designed to meet the bespoke demands of the rental market. Case Study Building homes for Britain Build-to-Rent schemes play an essential role in helping to solve the UK s chronic housing shortage. Our first such scheme, The Slate Yard in Salford, North-West England provided 225 apartments, designed specifically for the rental market. The scheme set a new standard for Build-to-Rent accommodation, making renting a choice not the only option. The scheme was designed with residents in mind. We spoke to renters and asked what they wanted and valued. The result was a variety of unit sizes and layouts, high quality interiors, attractive amenities, and onsite management and maintenance. We knew that location was also important, so the site was close to the heart of Manchester with good transport links for easy commuting. Given that there is no single demographic for Build-to-Rent, it follows that one size does not fit all. We worked to create living environments that could adapt accordingly, from flexible contracts to policies that encourage tenants to make their home their own. Solar panels were also installed to reduce the long-term running costs of communal spaces. 8 9
2018 Corporate Profile Focused on the long-term needs of clients, businesses and communities One Central Square, Cardiff. Joint venture partnership to fund the 400m development of over 1.2m sq ft of mixed use accommodation creating space for 10,000 jobs. Our investment capabilities encompass real estate, infrastructure and corporate debt. Sharing our knowledge across these areas enables us to develop deeper insights of markets and trends, and helps us to align the needs of our partners. We offer diverse equity and debt solutions that cater to the needs of every type of investor, with varying risk profiles and sector focus. All are united by one underlying principle: to meet investors demands for long-term assets and enhanced income, while having a positive impact on society and the environment. We offer our clients a range of pooled funds, both openand closed-ended, that provide access to the broad market with differing investment objectives. We also offer funds with a specialist sector focus, ranging from leisure parks to industrial estates and urban regeneration. We ve over 30 years experience of running segregated mandates. Drawing on our deep insights of the real assets sector, we create bespoke investment solutions that meet our clients individual needs. We run several joint ventures with like-minded partners who share our long-term investment ambitions. These partnerships tend to be focused on specific real estate or infrastructure deals where greater control and alignment of interest is required due to the complexity of the transaction. 10 11
Legal & General Investment Management, Real Assets 2018 Corporate Profile 245 Hammersmith Road, London. 275 million office joint venture, to develop a new, flexible and collaborative working environment. Real estate We re one of the UK s most active real estate managers. Clients have trusted us to invest their capital in real estate for almost 50 years. During that time, we ve built a strong network of industry relationships. This gives us excellent access to deals, be it debt or equity. Our experience enables us to add value across the entire market cycle, based on expert teams who are able to get the most out of each property. Our scale also sets us apart since it provides the depth of resource to specialise in individual sectors. This detailed focus on occupier and investment dynamics generates valuable insights that inform asset management plans and add value to our investment process. We understand that clients needs can change over time. Our proven track record of innovation includes solutions designed to meet those evolving requirements. We manage over 22.1 billion * in Real Estate Equity and Debt. * As at 31 December 2017 12 13
2018 Corporate Profile High Speed Rail 1. In 2017 we provided 120 million of fixed rate debt to support the successful 2017 acquisition of the UK s sole high speed rail link. Infrastructure Since our debut infrastructure deal in 2012, we ve become active investors in all key social and economic infrastructure sectors, managing 3.0 billion* of assets in the UK, across Europe, the US and Australia. This evolution in our investment capabilities, which continues to broaden, recognises clients growing demands for alternative sources of high quality income and long-term cash flows. Infrastructure transactions are often complex to arrange and require a long-term commitment, potentially for several decades. We understand that borrowers need a reliable partner, and seek to form strong relationships, founded on trust, shared ethos with a desire to have a positive social and economic impact on communities. We seek to have an early involvement in potential deals to optimise the structure of the transaction, negotiating covenants to protect the security of income. Our approach is underpinned by robust in-house credit analysis to ensure we understand and manage associated risks. We manage over 3.0 billion * of Infrastructure Debt. * As at 31 December 2017 14 15
Legal & General Investment Management, Real Assets 2018 Corporate Profile Goshawk. We provided 35.5m of long term finance to facilitate the continued growth of this specialist aircraft leasing platform. Corporate debt We lend to investment grade corporate and public sector entities, working with borrowers to complement or extend debt finance from banks. Since entering the market in 2016, we have completed 900 million* of transactions in the UK, across Europe, the US and Australia. As long-term lenders to a business, we are stakeholders in its future success. Therefore, we seek to develop and build relationships with each of the businesses that we lend to. Knowing these businesses helps us to understand any stresses in their business models and also ensures we are well placed to provide further support if needed. In contrast to public markets, many borrowers in the private markets are not rated. Leveraging our direct access to management teams, our in-house credit analysts assign independent ratings that mirror those issued by external credit rating agencies. This helps us ensure each deal is structured appropriately and the level of compensation adequately reflects the risk taken. We manage over 1.9 billion * of Corporate Debt. * As at 31 December 2017 16 17
2018 Corporate Profile Case Study Breaking new ground in the US University of California. The first educational sector public-private partnership to take place in the US, our long term financing will help to nearly double the size of the University Campus. The difference between alternative real estate, infrastructure and corporate credit is becoming less distinct. In part, this reflects the growth of private / public sector partnerships, as well as the move by private entities into areas traditionally provided by the public sector. The integration of infrastructure and corporate credit into our Real Assets offering means we can take a holistic view of any opportunity and can look at transactions from different perspectives. When the University of California, Merced, was looking to expand its campus, we broke new ground by becoming part of the first educational private/ public sector partnership to take place in the US. Our strong track record in infrastructure, existing presence in the US and expertise across real assets meant we had longevity and the vision that the University of California needed in a partner. The financing will help to nearly double the size of the existing campus, adding new classrooms, laboratories, student accommodation and amenities to sustainably enhance student life and further academic distinction. In addition, it will help one of the poorest areas in California, creating new jobs and having a positive impact on the local community. 18 19
CONTACT US Please contact LGIM Real Assets Solutions Team for more information. Legal & General Investment Management One Coleman Street London EC2R 5AA +44 (0) 20 3124 2700 lgim.com/realassets contactrealassets@igim.com IMPORTANT INFORMATION The information contained in this document (the Information ) is issued by Legal & General Investment Management Limited, LGIM Real Assets (Operator) Limited, and/or their affiliates ( Legal & General, we or us ). Such Information is the property and/or confidential information of Legal & General and may not be disclosed by you to any other person without the prior written consent of Legal & General. The information has been produced for information and discussion purposes only and it is not intended to constitute advice (investment, legal, tax advice or otherwise). The information should not form the basis of any investment decisions by you and we are not acting as a fiduciary to you. You should consult with your own professional advisors before taking any action based on the information in this presentation as Legal & General does not (to the fullest extent permitted by law) accept any responsibility for any act or omission taken in reliance of the information contained in this presentation. The information sets out the opinions of Legal & General and is not a guarantee of future events or the profitability of any investment product or service. Please do not circulate this information to any third party without our prior written consent. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272. LGIM Real Assets (Operator) Limited. Registered in England and Wales No. 05522016. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 447041. 20