Balfour Beatty reaches first close on funds management business

Balfour Beatty, the FTSE 250 international infrastructure group, said Thursday that its infrastructure funds management business, Balfour Beatty Infrastructure Partners (BBIP), has reached first close on its first fund.

BBIP, which was set up in 2011, with the recruitment of four senior individuals, reached first close with $317m (£200m) of commitments, of which Balfour Beatty has committed $110m (£70m).

The company plans to ultimately reduce its share in the fund to around 10%.

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It said that subsequent levels of close are expected during the course of 2013, and that drawdowns will be dependent on the timing of investments by the fund - although it is anticipated that Balfour Beatty's commitment will be invested over the next 3-4 years.

The company intends to use the fund to make investments in predominantly operational assets into its key target sectors of transport, energy and utilities across the UK, Europe, and North America.

Explaining the aim of the fund management business, Balfour said: "Our objective was to utilise a combination of infrastructure asset knowledge, skills and experience that has accumulated within the group, particularly in the Infrastructure Investments division and Parsons Brinckerhoff, to earn a superior return on capital as well as advisory fees.

"A funds management business would also leverage our capabilities into greater pools of capital while diversifying risk to the group."

The share price rose 0.24% to 290.70p by 08:31.

NR