The PFI secondary market - a natural progression?

United Kingdom

Financial investors have been at the forefront of the development of the PFI/PPP market. It was their willingness to raise the funding and to invest time and effort in bidding with contractors and operators for the first PFI projects, in conjunction with contractors and operators, which led to the creation of the market itself.

However, as the UK PFI market matures and more projects reach their operational phase, a secondary market for private finance equity is gaining momentum.

On completion of the construction phase the risk profile of a project reduces which increases the value of the original equity investment, and makes divestment an attractive option for both financial investors and commercial players actively managing their investments. It has been estimated that 65% of the 530 PFI projects signed to date have reached construction completion and moved into the operational phase, with many more projects being forecast to complete over the next two years.

There is good reason to suggest that there will be considerable movement within the equity ownership of PFI projects in the near future and, in particular, many see the sale of equity investments as a natural progression of PFI.

To find out more about the PFI secondary market please either click here to download a pdf or contact either Sandra Rafferty on +44 (0)20 7367 2804 or at [email protected] or Jason Davies on +44 (0)20 7367 2194 or at [email protected]