Friends Life has announced a new £500m infrastructure mandate, which the company has awarded to MetLife Investment Management.
The mandate relates to the investment in infrastructure loans within Friends Life’s annuity funds and follows the announcement in July that the company had secured a separate £500m commercial real estate loan mandate with Pricoa Mortgage Capital, the commercial mortgage business of Pramerica Investment Management Ltd. The infrastructure assets will be UK-based, senior secured, long-term loans.
Friends Life believes an allocation to infrastructure loans will increase returns and sustainable cash generation, by delivering more value in the annuity book.
In April of this year, Friends Life agreed a £75 million amortising loan facility with Drax Group Plc. The loan will mature in June 2018 and is underpinned by a guarantee from HM Treasury issued under the Infrastructure UK Guarantee Scheme.
Mark Versey, Chief Investment Officer at Friends Life, commented:
“We are very pleased to begin this new agreement with MetLife Investment Management. Following extensive analysis of our annuity fund portfolios, we identified infrastructure loans as an attractive alternative credit asset that would effectively meet the ongoing needs of the funds. Infrastructure loans fulfil our desire for increased diversification of assets within the annuity book, while facilitating further investment into current UK development opportunities. MetLife Investment Management demonstrated specific expertise in investing in this asset class and we look forward to building our relationship together.”
John Tanyeri, Managing Director and Head of MetLife Investment Management’s Infrastructure group, commented:
“We are extremely pleased to be working with Friends Life through a custom-tailored solution to meet their needs. Because MetLife and Friends Life will invest in each transaction, this is an agreement with a consistent approach, parallel objectives and aligned interests.”
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