Today the region’s power network operator, Electricity North West, has announced that institutional investors advised by First State Investments and J.P. Morgan Asset Management have entered into an agreement to sell 50% of their stake in the company to investors composed of Equitix and a consortium led by Kansai Electric Power Co. Inc.
Owned by First State Investments and J.P. Morgan Asset Management since 2007, Electricity North West is now also looking forward to working with the Kansai-led consortium and Equitix to deliver its current price control which runs to 2023 (RIIO-ED1) and to create a plan for the next price control from 2023 to 2028 (RIIO-ED2) which delivers strong stakeholder and shareholder value.
Electricity North West has a rich history in delivering high performance to the five million people across the region and will continue to serve and prioritise both its communities and its employees.
John Roberts, Chair of Electricity North West, said: “I am extremely proud of what we have achieved over the years and this is down to the hard work, dedication and commitment of our people to provide the best service to our communities and customers across the North West.
“We are a high performing organisation and I’m delighted that First State Investments and J.P. Morgan Asset Management are showing ongoing confidence in and commitment to our Company. I’m also delighted to welcome the addition of the Kansai-led consortium and Equitix and look forward to working closely with them.”
Niall Mills, Partner at First State Investments, said: “The signing of this agreement marks a significant step in our 12-year journey with Electricity North West, allowing First State and J.P. Morgan Asset Management to realise value for the investors we advise, while also retaining an interest in the business. We welcome our new partners as shareholders.”
Matt Le Blanc, Managing Director at J. P. Morgan Asset Management, said: “As an owner and operator of this critical UK infrastructure since 2007, the Company has performed strongly with continued support and investment. The signing of this agreement recognises that success for our investors, which comprise over 40 million families’ pensions schemes, of which over 10 million are in the UK. We look forward to continuing to work with our existing and new partners.”
Hiroshi Nakajima, Managing Executive Officer, International Business and Cooperation Division, Kansai Electric Power Company, said: “This is the first case of Japanese electric utility companies entering into an overseas major electricity distribution network operator business. We aim to develop a long term and strategic collaboration with Electricity North West to create solutions to proactively address the current challenges to distribution networks which include smart cities, electric vehicles and virtual power.”
Hugh Crossley, Chief Investment Officer for Equitix, said: “We are excited to partner with Kansai to acquire this stake in Electricity North West. Our partnership brings strong strategic and asset management expertise which will help fuel growth and sustained outperformance for one of the UK’s premier distribution network operators, while providing a great service for customers.”
Additional information:
About Electricity North West
Electricity North West Limited is a distribution network operator which owns, invests in, operates and maintains the network which carries electricity from the national grid to homes and businesses across the North West. It serves approximately 5 million customers across 2.4 million premises. Electricity North West operates from urban Manchester to rural Cumbria with a network of 57,000km of cables and wires.
About First State Investments
First State Investments is an experienced global asset manager with in excess of €127 billion managed on behalf of investors worldwide as at 31 December 2018. First State is a leading manager of infrastructure investments with over €8.0 billion of unlisted infrastructure capital under management, having been actively investing in long life infrastructure businesses since 1994. First State’s unlisted infrastructure portfolio includes 21 transport, renewable and utility investments in 13 countries.
About J. P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of USD 1.8 trillion (as at June 30, 2019), is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of USD 2.7 trillion (as at 30 June 2019) and operations worldwide.
Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
About Equitix:
Founded in 2007 and headquartered in London, Equitix is a leading infrastructure investment firm that manages over £4.5 billion on behalf of long term investors, including a large proportion of UK pension funds. We manage six core infrastructure flagship funds, 14 co-investment funds which are dedicated to larger infrastructure projects, and a number of segregated managed accounts providing customized solutions. Our investment strategy focuses on core infrastructure projects, predominantly located in the UK and covering a wide range of sectors with a particular focus on social infrastructure, transportation, regulated utilities and renewables. Across all of our core funds, we seek to hold assets for the life of the fund, which is typically 25 years. We have acquired over 270 core infrastructure projects since our inception, thereby establishing a strong reputation as a trusted partner, operator and fiduciary fund manager.
About Kansai Electric Power Co. Inc.
Established in 1951, the Kansai Electric Power Co. Inc is a leading Japanese energy company which owns and operates generation, transmission and distribution assets. It also owns gas and telecommunications businesses in Japan. It serves more than 13 million customers in the Kansai region of Japan and operates over 170 power plants including thermal, hydro, nuclear and renewables. The Company also owns 18 energy projects in 11 countries, including the UK and Ireland. The Company is recognised as a leader in innovation and is keen to build a strategic innovation partnership with Electricity North West over the long term.
This consortium is composed of Kansai with Daiwa Energy & Infrastructure Co. Ltd and Mitsubishi UFJ Lease & Finance Company Limited.
About Daiwa Energy & Infrastructure Co. Ltd
DEI is a core strategic subsidiary of Daiwa Securities Group Ltd., for exploring further investment opportunities in infrastructure assets, renewable energy and resource. The balance of investment is JPY31 billion (GBP 210 million) at the end of March 2019.
About Mitsubishi UFJ Lease & Finance Company limited
MUL is a global leasing company based in Tokyo, Japan, and publicly listed on the Tokyo and Nagoya Stock Exchanges, and a member of Mitsubishi UFJ Financial Group (MUFG), one of the world’s largest financial companies. MUL addresses a diverse range of customer needs by expanding upon the functions we offer, from lease finance, corporate finance, service provision, business participation, to business operation. MUL’s recent equity investments in the global infrastructure business as a priority industry include a water company and an offshore wind farm in the UK.
For more information on RIIO-ED1: https://www.ofgem.gov.uk/network-regulation-riio-model/current-network-price-controls-riio-1/riio-ed1-network-price-control
For more information on RIIO-ED2: https://www.ofgem.gov.uk/network-regulation-riio-model/network-price-controls-2021-riio-2/what-riio-2-price-control
