One of Britain’s leading financial mutuals is in talks to buy Dalmore Capital, the infrastructure investor with a stake in the Thames “super sewer”.
Sky News has learned that Royal London is among the suitors surrounding Dalmore, which began considering a sale earlier this autumn.
Royal London’s interest is serious but has not yet resulted in a firm offer, according to infrastructure sector sources.
Last money: Increase in the price of Christmas dinner, anti-inflationary
Other parties have also reportedly expressed interest in purchasing Dalmore, they added.
If Royal London strikes a deal, it would reflect the growing push by traditional asset managers towards so-called alternative solutions such as infrastructure.
BlackRock, the world’s largest fund manager, recently purchased Global Infrastructure Partners (GIP), the former owner of London’s Gatwick Airport.
RLAM, the asset management arm of Royal London, manages more than £170 billion of its clients’ money.
Learn more: A tough message to swallow on sewage from Thames boss
Dalmore is much smaller than GIP, with £6bn of assets under management, but it is well regarded in the sector and has a sizeable portfolio of assets.
Among them are participations in River Thames the 25km Tideway supersewer, which is expected to be fully operational next year; Porterbrook, a major owner of rolling stock for British Railways; Cory, the waste-to-energy giant.
It also supports IEP West, a rolling stock contract with the government to service dozens of Hitachi Intercity Express trains and three depots for the Great Western Main Line.
A person close to Dalmore said the combination of a normalization of asset prices and the new government’s announcement of plans to increase infrastructure investment would create an attractive macroeconomic backdrop for the company.
Read more on Sky News:
Thames Water reveals increase in sewage spills
Rupert Murdoch loses legal attempt to take control of his empire
Man charged in murder of UnitedHealthcare CEO
Dalmore is majority owned by its founders, with GCM Grosvenor also a shareholder.
Estimates of its value vary, although some market sources suggest it could be around £100 million.
Both Royal London and Dalmore declined to comment.