The Pension Insurance Corporation has invested £50m in the LSE to fund sustainable developments.
PIC, a specialist insurer of defined benefit pension schemes, said the debt investment in the London School of Economics and Political Science’s pipeline would include the development of its first carbon-neutral building, 35 Lincoln’s Inn Fields, WC2.
This deal follows PIC’s £129m investment with the LSE and DIF Capital Partners to fund the development of a 676-bed student residence in Southwark, SE1, in January 2022.
The £50m direct, long-dated private placement will feature a deferred drawdown structure, with funds being drawn in 2027. The debt will not mature until 2072, in line with PIC’s long-term pension payments.
35 LIF will include adaptable spaces for teaching, research and conferences, with sustainability, energy efficiency and carbon minimisation at the core of its design. It will be home to the university’s high-computing facilities hub, housing the Data Science Institute and is aimed at MBA students and future leaders of the digital economy.
LSE chief financial officer Mike Ferguson said: “This long-dated funding with PIC reflects both the financial strength of the LSE and its positive long-term prospects in the higher education sector. The team at PIC impressed us with their knowledge of the sector and flexibility in designing a funding structure that meets our commitment and ambition to embedding sustainability across our activities.”
Thomas Foucoin, senior debt origination manager at PIC, said: “We are pleased to have been selected by the LSE to participate in this latest funding round.
“The deal highlights PIC’s track record of completing repeat transactions with our valued investment counterparties. We are now supporting the LSE for both its student accommodation requirements and for wider development of its education facilities and data science offering. This investment backs our future pension payments and enhances retirement security for our policyholders.”
To date PIC has invested £2.5bn in the UK’s education sector.
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