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L&G And Schroders In £200m Regeneration Drive

Two fund management giants will announce a £200m investment in an urban regeneration scheme in Berkshire, Sky News understands.

Two of the UK's biggest fund managers are to commit £200m to an urban regeneration project that will underline such companies' growing emphasis on the deployment of 'slow money'.

Sky News understands that the property investment arms of Legal & General (L&G) and Schroders will announce later this month that they have reached an agreement to spend the capital on redeveloping Bracknell town centre in Berkshire.

The initiative will focus on the creation of new commercial, retail and residential developments in Bracknell, with work expected to start in the spring.

The involvement of L&G and Schroders is significant because it illustrates how larger asset managers are increasingly turning to direct investments to generate long-term returns.

The companies have been working together on the project for several years, with this month's news an important milestone, according to City sources.

News of the Bracknell redevelopment project comes a week after Sky News disclosed L&G's plan to establish a broader urban rejection vehicle, which could include a total funding commitment of £15bn.

Greg Clark, the Cities Minister, hosted a meeting attended by sovereign wealth funds from China, Kuwait and Qatar, major pension funds such as the Canada Pension Plan Investment Board and other UK insurers such as Aviva and Prudential.

Property companies including Land Securities were also present at the meeting, which focused on urban regeneration in Birmingham, Bristol and Leeds.

Mr Clark, a Conservative minister in the coalition, is keen to assess investor appetite for a string of projects on which work can commence as early as this year.

Executives from L&G, which has been expanding its infrastructure operations under Nigel Wilson, its chief executive, have agreed to act as the investment principal, meaning that it is likely to supervise decisions about which projects to deploy capital on.

"The UK is a terrific place to invest," Mr Wilson said, who has talked repeatedly about the attractiveness of deploying long-term, or "slow" capital.

"We are well-positioned to work alongside UK and international money to channel funds into regeneration that delivers growth, homes and jobs."

The meeting comes amid a broader government push for international investors to put money into UK infrastructure, with hundreds of billions of pounds required for flagship projects such as the HS2 high-speed rail link and the new Thames Tideway sewage system.

George Osborne, the Chancellor, recently reaffirmed support for a 'northern powerhouse' that would be aimed at closing the economic gap between northern and southern England.

L&G declined to comment, while Schroders could not be reached for comment.

Source:  Sky.com

Sam: 6th Feb 2015 15:43:00

 

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