• Home
• /
• Local business

ADIA Buys Stake in Gatwick Airport

ABU DHABI - Abu Dhabi Investment Authority (ADIA), has purchased a significant stake in London’s Gatwick Airport. The stake is estimated to be as large as 15 per cent of the airport’s total shares and worth $196.4 million.

“ADIA is a minority shareholder in Gatwick,” a spokesman for ADIA, considered to be the world’s largest sovereign wealth fund, told Khaleej Times on Friday.

ADIA declined to comment on the size of the stake, or the number of shares acquired. But market sources said that ADIA has purchased around 15 per cent of Gatwick, London’s second largest airport, from Global Infrastructure Partners (GIP), which is the majority shareholder of the airport.

Asked about the price of the deal, estimated by some international newswires at $196.4 million, the spokesman said: “Different numbers are being thrown at me by different people on this. But ADIA doesn’t disclose the amount it paid in such investments as a matter of policy.” He also declined to comment on when the deal was made. “The purchase is complete,” he said.

GIP is a $5.64 billion infrastructure fund set up by Credit Suisse and General Electric. It bought Gatwick last year from British Airports Authority (BAA), majority owned by Spain’s Ferrovial, for £1.51 billion.

South Korea’s National Pension Service had said two days back that it planned to buy a 12 per cent stake in Gatwick for around £100 million.

ADIA, believed to have assets of around $500 billion to $700 billion, has a strategy of buying minority stakes in infrastructure assets as a long-term investor. ADIA had said in the past that it would not seek management or operational control over any of the assets in which it invests. This means that control of Gatwick airport will continue to stay with GIP. GIP said on Tuesday that it plans to remain a majority shareholder in Gatwick.

Sovereign wealth funds are emerging as major investors in infrastructure, alongside pension funds and insurance companies, although opportunities for them can be limited as many governments consider infrastructure to be a strategic sector.

ADIA has found a favourable investment environment in infrastructure in Britain’s regulatory framework, which is open to foreign investors. Last month it was reported that ADIA has formed a consortium together with a Macquarie infrastructure fund and Canada Pension Plan to bid for the sale of French utility EDF’s British distribution arm.

ramavarman@khaleejtimes.com