Macquarie-led consortium completes acquisition of the Green Investment Bank
Edinburgh/London, 18 Aug 2017
Further to the announcement of 20 April 2017, a Macquarie-led consortium comprising Macquarie Group Limited (Macquarie), Macquarie European Infrastructure Fund 5 (MEIF5) and Universities Superannuation Scheme (USS) has successfully completed the acquisition of the UK Green Investment Bank Limited1 (Green Investment Bank) from HM Government for £2.3 billion.
Under Macquarie’s ownership, the Green Investment Bank will remain one of the leading investors in green infrastructure in the UK and Europe, with added scope to further expand internationally. Macquarie will adopt the Green Investment Bank as its primary vehicle for principal investment in green projects in the UK and Europe and will consolidate its own existing UK and European principal investment business into that vehicle.
Macquarie Capital, the advisory, capital markets and principal investment arm of Macquarie Group, and the Green Investment Bank have together led over £15 billion of investment in the UK across a broad range of renewables technologies. These include: energy efficiency, bioenergy, energy from waste, onshore and offshore wind, low carbon transport, solar and tidal energy and energy storage.
The Green Investment Bank, under Macquarie ownership, will work together with the Green Purposes Company Trustees to ensure all investments are aligned with its green purpose. This will include publishing an annual report, featuring details of its green performance, and holding an annual industry day for stakeholders; the first of which will be held prior to the end of 2017.
As previously announced, Macquarie has committed to the Green Investment Bank’s target of leading £3 billion of investment in green energy projects over the next three years, operating in accordance with its established green purpose.
In line with these commitments and in order to pursue the Green Investment Bank’s vision to invest in green infrastructure internationally and positively contribute to the globalisation of the renewables industry, the Green Investment Bank will now operate under the name Green Investment Group. This is necessary to overcome the legal and regulatory barriers to using the term "Bank" in many international markets.
As part of Macquarie, the Green Investment Group is now one of Europe’s largest teams of green energy investment specialists, with expertise in project finance and development, construction, investment and asset management of green energy infrastructure. The team will continue to be based in Edinburgh and London.
The Green Investment Group will be led by Edward Northam, working closely with Macquarie Capital’s senior leadership team. Mr. Northam joined the Green Investment Bank in 2012 and was most recently its Head of Investment Banking, leading the Green Investment Bank’s investment origination and execution activities. Mr. Northam’s appointment follows a career spanning almost 25 years in renewable energy and infrastructure development. Shaun Kingsbury will now step down from his role as Chief Executive Officer and will not join Macquarie Group. Mr. Kingsbury played an important role in establishing the Green Investment Bank and has provided valued support throughout the transition period.
Daniel Wong, Head of Macquarie Capital Europe, said: "Combined with Macquarie’s resources as the world’s largest infrastructure investor, the Green Investment Group will be uniquely placed to continue in its pioneering role in the world's transition to a low-carbon economy. We look forward to growing the Green Investment Group’s capacity and its contribution to the UK and global renewables markets."
Lord Smith of Kelvin, Chair of the Green Investment Bank up to the completion of the transaction, said: "Today marks the beginning of an exciting new chapter for the Green Investment Bank. Under Macquarie ownership, the business will have the support it needs to deliver a growing green impact, at home in the UK and now abroad."
"I'm confident that with this support the Green Investment Bank, nurtured so well through its early years by the UK Government, will go on to bigger and better things.
"If the Paris Agreement is to be delivered we need to see mature green infrastructure delivered quickly and at scale, alongside the rapid development of emerging technologies. To achieve this the world needs committed, innovative, specialist, experienced investors with access to deep and flexible pools of capital. The Green Investment Group will now have the platform to meet that market need and fulfil its full potential."
Edward Northam, Head of the Green Investment Group, said: "This new chapter provides the best of both worlds: a deep sector specialism coupled with access to a global platform and deep pools of capital. We have ambitious plans for the growth of the Green Investment Group, starting with a continuation of our role as a leading investor in the UK and building on that through an additional international focus."
Mark Dooley, Head of Energy and Infrastructure, Macquarie Capital Europe, said: "In the Green Investment Bank, we found a real depth of expertise and decades of experience that will underpin our collective aspirations in renewables investment. Taking the Green Investment Group to the next stage of its evolution coincides with many green technologies competing commercially with traditional forms of power generation without the need for subsidies."
As previously announced, the Green Investment Bank will continue to collaborate with the Department of Business, Energy and Industrial Strategy in the joint venture UK Climate Investments LLP (UKCI). The Green Investment Group remains committed to UKCI and its vision to invest in green infrastructure in selected developing countries.
The transaction is not material to Macquarie Group’s earnings and financial position.
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Macquarie Group Limited (Macquarie) is a diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities. Macquarie has been an active investor and adviser in the renewable energy and clean technology sectors for over 15 years. Drawing on its global network, sector expertise and strong record, Macquarie is supporting the transition to a lower carbon economy by servicing clients across various renewable energy technologies. Since 2010 Macquarie and Macquarie-managed funds have invested or arranged over £8.5 billion of capital into renewable projects globally.
Founded in 1969, Macquarie employs 13,597 people in over 27 countries. At 31 March 2017, Macquarie had assets under management of £294 billion.
Macquarie Capital is the advisory, capital markets and principal investment arm of Macquarie Group. Macquarie Capital provides strategic M&A and capital raising advice as well as partnering with clients by investing capital into their projects and companies. Globally Macquarie Capital focuses on six core sectors: infrastructure, utilities and renewables; real estate; telecommunications, media, entertainment and technology; resources; industrials; and financial institutions, with 417 transactions completed, valued at £93 billion in the year to 31 March 2017. In Europe, Macquarie Capital has a strong track record in partnering with utilities and developers in building new energy, infrastructure and real estate projects.
MIRA is part of Macquarie Asset Management, the asset management arm of Macquarie. MIRA pioneered infrastructure as a new asset class for institutional investors. For more than 20 years we have been investing in and managing the assets that people use every day – extending beyond Infrastructure to Real Estate, Agriculture and Energy. Our dedicated operational and financial experts work where MIRA’s funds invest and their portfolio companies operate. They are part of a far reaching global team which helps clients to see across the regions and deep into local markets. At 31 March 2017, MIRA has assets under management of £94.1 billion invested in 129 portfolio businesses, ~300 properties and 4.5 million hectares of farmland. Among the funds managed by MIRA is the Macquarie European Infrastructure Fund 5 (MEIF5) which is a €4 billion Euro-denominated fund focused on investment opportunities in utilities, transportation, communications infrastructure and renewable energy throughout Europe and is managed by Macquarie Infrastructure and Real Assets (MIRA).
Universities Superannuation Scheme was established in 1975 as the principal pension scheme for universities and other higher education institutions in the UK. It has circa 375,000 scheme members across more than 360 institutions and is one of the largest pension schemes in the UK, with total fund assets of approximately £60 billion (as at May 2017).
The scheme's trustee is Universities Superannuation Scheme Limited, a corporate trustee which provides scheme management and trusteeship from its offices based in Liverpool and London. The trustee company delegates implementation of its investment strategy to a wholly-owned investment management subsidiary company - USS Investment Management Limited - which provides in-house investment management and advisory services. For more information on Universities Superannuation Scheme please go to www.uss.co.uk/.
- UK Green Investment Bank Limited and Green Investment Group Limited are part of the Macquarie Group. Green Investment Group Limited and UK Green Investment Bank Limited are not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. A wholly owned subsidiary, UK Green Investment Bank Financial Services Limited, is authorised and regulated by the Financial Conduct Authority.
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