The UK’s second-largest pension fund, the £37.9bn (€44.6bn) Universities Superannuation Scheme (USS), is to invest nearly £400m in Heathrow Airport.
Under terms of the deal, USS will invest £392m in exchange for an 8.65% stake in FGP Topco, the London airport’s holding company.
It marks the defined benefit fund’s single-largest domestic infrastructure investment to date.
Roger Gray, chief executive at USS Investment Management, said the 8% stake represented a “premier” infrastructure asset.
“Investment in UK infrastructure is a win-win – promoting economic growth and jobs whilst providing attractive investments for the trustee board in meeting its commitments to members,” he said.
The wholly owned asset manager’s head of private markets, Michael Powell, said Heathrow had a “bright future” as the country’s only hub airport, and that USS looked forward to the outcome of the Davies Commission, set to recommend where runway capacity in the south-east of the country should be expanded.
“We have confidence the right incentives will be set in place to encourage the investment Heathrow and the UK needs,” Powell added.
USS has been active in the infrastructure market, buying Airtrain Holdings last year for AUD110m (€87m).
The monopoly train provider is responsible for maintaining the rail link between Brisbane Airport and Brisbane centre.
It has also repeatedly provided water utilities in the UK with debt funding, and was part of a consortium involved in a £5bn bid for water provider Severn Trent.