GIP nears completion of next Gatwick sale

13 September 2019 - 12:00 am UTC

Global Infrastructure Partners and co-shareholders are close to wrapping up their sale of a 49% stake in Gatwick Airport, sources said.


The sellers are in the process of selling some or all of their remaining stakes in the UK’s second biggest airport following their sale earlier this year of a majority stake to France’s VINCI Airport, Gatwick said in June. The remaining stakes will be held in a continuation fund managed by GIP.


Several sources said that the process, on which Barclays is advising GIP, is now around 80% complete, and that the sellers are in talks with remaining potential buyers, including Pantheon Ventures and Stepstone Infrastructure and Real Assets.


Stepstone, which has offices in London, New York and 16 other cities around the world advises institutional investors on investing in sectors including infrastructure.


Pantheon has invested through three infrastructure funds and managed accounts for individual clients, making fund commitments, co-investments and acquiring LP fund interests predominately in Europe and North America.


A Korean press report in June said that local investment companies Hanwha Investment & Securities and NH Investment & Securities have acquired a combined 2.85% stake during the continuation process.


The process comes after GIP together with existing shareholders ADIA, CalPERS, NPS and Future Fund completed the sale of a 50.01% stake in the airport to VINCI earlier this year to French airports group Vinci for a GBP 2.9bn equity price. The price was equivalent to an enterprise value of around 19 to 20 times EBITDA of GBP 411m for the year ended 31 March 2018.


The sale sets a new precedent for the sector, whereby the price set for investors participating in the continuation process is on equivalent terms to the price paid by Vinci Airports through a conventional trade sale.


The structure is seen as a possible solution to investor concerns that traditional continuation processes did not always achieve the best market price for selling investors.


Following the sale, the stakes of GIP and its co-shareholders halved, leaving GIP with 21%, ADIA with 7.9%, NPS with 6%, CalPERS with 7.4% and Future Fund with 8.4%.


Although Gatwick said the existing shareholders are selling down their stakes, at least some are likely to remain as shareholders. CalPERS for example said in June that it now has a 9.99% stake in the airport, plus “a further smaller indirect interest in Gatwick through another consortium vehicle managed by GIP.”


The GIP management team is also known to be investing a significant portion of the performance fee they generated through the sale of their stake to Vinci Airports into the new continuation fund.


ADIA declined to comment. GIP, Pantheon Ventures and Stepstone Infrastructure and Real Assets did not immediately respond to requests for comment. NPS, Future Fund, Hanwha Investment and NH Investment could not immediately be reached for comment.


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