News & Analysis

Balfour Beatty sells infra stake to Kuwaiti group amid spin-off

The UK developer's $618m fund has made investments that include solar power, marine transportation and energy utilities in Europe and the US.

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Balfour Beatty, an infrastructure developer, has spun off the team that manages its 2014-vintage fund and has sold its entire stake in the vehicle to an investment group backed by the Kuwaiti government.

Following the transaction, the manager, Balfour Beatty Infrastructure Partners LLP, has rebranded as Basalt Infrastructure Partners and will manage the $618 million Balfour Beatty Infrastructure Partners (BBIP) fund.

“Our exit from BBIP and sale of the Fund interest further simplifies the Group and maintains our existing balance sheet strength,” Leo Quinn, Balfour Beatty’s chief executive, said in a statement. “Exiting the infrastructure fund management market will allow our core infrastructure investments business to focus entirely on its highly successful primary investments portfolio which also offers further downstream opportunities for the Balfour Beatty Group.”

Balfour Beatty, which initially committed $110 million to BBIP, sold its entire stake in the fund to New York-headquartered Wafra Investment Advisory Group, an investment firm owned by The Public Institution for Social Security of Kuwait, an autonomous state-backed agency.

Wafra has agreed to pay $64.4 million for Balfour Beatty’s stake in the London-listed vehicle, and the acquisition includes a proportion of the rights to participate in the carried interest generated by BBIP.

Wafra was founded in 1985 to manage US assets for financial institutions of Kuwait and other Gulf states. It has since broadened its mandate and now serves more than 30 institutional and private global clients.

BBIP has made infrastructure investments including UK solar portfolio McEwan Power, Isle of Wight-based Wightlink Ferries, UK power business Alkane Energy, Michigan utility Upper Peninsula Power Company, Texas Microgrid and a Spanish transportation asset.

In a phone interview with sister publication Infrastructure Investor, Rob Gregor, from Basalt’s management team, said BBIP was now nearly fully invested.