One of Britain’s leading financial mutuals has entered exclusive talks to buy Dalmore Capital, the infrastructure investor which owns a stake in London’s new ‘super sewer’.
Sky News has learnt that Royal London is now the leading contender to acquire Dalmore, which has roughly £6bn in assets under management.
The structure of the proposed deal means its valuation is not fixed, but is expected to involve Royal London paying approximately £130m, according to infrastructure executives.
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Dalmore owns stakes in Thames Tideway’s 25km super-sewer, which is expected to be fully operational next year; Porterbrook, a leading owner of rolling stock for Britain’s railways; and Cory, the waste-to-energy giant.
In January, it acquired the remaining assets of Triple Point Energy Transition, an investment trust that was in wind-down mode.
It is also a backer of IEP West, a rolling stock contract with the government to maintain dozens of Hitachi Intercity Express Trains and three depots for the Great Western Main Line.
If Royal London concludes a deal with Dalmore, it would reflect a growing push by traditional asset managers into so-called alternative assets, including infrastructure.
BlackRock, the world’s biggest fund manager, recently swooped to buy Global Infrastructure Partners, the former owner of London’s Gatwick Airport.
RLAM, Royal London’s asset management arm, manages more than £170bn of clients’ money.
A person close to Dalmore said previously that a combination of normalising asset prices and the new government’s signalling of plans to increase infrastructure investment would create an attractive macroeconomic backdrop for the firm.
Dalmore is majority-owned by its founders, with GCM Grosvenor also a shareholder.
Other bidders for the firm are said to have included John Laing, which is owned by the investment giant KKR.
A deal could be signed within weeks, according to insiders.
Royal London and Dalmore both declined to comment.
