Universities Superannuation Scheme, London, agreed to acquire the Green Investment Bank alongside other institutional investors in a Macquarie-led consortium, said a USS spokeswoman.
Following completion of the £2.3 billion ($2.9 billion) deal, the Green Investment Bank will establish three new investment strategies over the next three years, including an offshore wind strategy, a low-carbon lending platform and a green infrastructure investment platform, a USS news release said.
Founded by the U.K. government, the Green Investment Bank was set up to back green projects with the capital from public funds. The bank will manage £4 billion upon the completion of the deal.
The £56 billion pension fund will own 25% of the offshore wind fund, as well as a significant portion of the Green Investment Bank’s existing loan portfolio with a value in excess of £200 million, according to a source familiar with the deal.
"This transaction has enabled USS to acquire a portfolio of high-quality renewable energy assets on behalf of our members. The assets include offshore wind projects and a portfolio of renewable loans, illustrating our capability to invest across the capital structure," Mike Powell, head of private markets at USS, said in the release.
Martin Stanley, global head of Macquarie Infrastructure and Real Assets, added in the same release: “The opportunity to deploy capital from Macquarie European Infrastructure Fund 5 into the Green Investment Bank’s offshore wind platform provides the fund with an attractive investment in a diverse portfolio of offshore wind assets in the U.K.”
A key focus of USS’ investment mandate is to deploy capital in U.K. infrastructure assets that provide stable, long-term, inflation-linked cash flows, said the release.
The Macquarie-led group comprises Macquarie European Infrastructure Fund 5 investors from around the world including insurance companies, pension funds and sovereign wealth funds, said a spokesman for Macquarie. He declined to disclose the names of the fund’s investors.
USS’ spokeswoman declined to disclose future investment plans associated with the deal.
The transaction is expected to complete in the first half of 2017, subject to regulatory approvals.