In line with its investment strategy and long-term objectives, GLIL manages a diverse transport portfolio that should display the following characteristics:

• Assets are substantially backed by durable physical assets;
• Assets display long life and low risk of obsolescence;
• Assets provide identifiable and reliable cash flows that are explicitly or implicitly inflation-linked;
• Assets seek returns that are largely isolated from the business cycle and competition;
• Assets generate returns that show limited correlation to other asset classes.

Among its holdings is a 25% stake in the M6toll, a 27 mile (43 kilometre), dual three-lane carriageway near the UK’s second largest city, Birmingham, that functions as a congestion relief road for the toll-free M6 motorway and nearby A roads. In recent years, several strategic initiatives have been undertaken to improve the road for the motorists who use it every day, including investments in digital technologies to maintain the road as a world class tolling system. Another key point that attracted GLIL is its ESG credentials: The M6toll has already achieved material reductions in carbon emissions, operational safety improvements, and meaningful community engagement.

GLIL currently holds a 30% equity stake in Agility Trains East (ATE), a rolling stock fleet of 65 new intercity trains on the UK’s East Coast Main Line. ATE was established as part of the UK’s Department for Transport’s initiative to replace the country’s intercity trains with a new reliable and efficient fleet. GLIL was attracted to the fleet thanks to its long-term credentials, including a long-term maintenance agreement and a 27.5-year guarantee period with the UK Department for Transport.

Elsewhere, GLIL provides equity for a new fleet of rolling stock operating on two of the UK’s regional rail networks: East Anglia and South West. This is a focussed investment on high-quality core fleets that serve economically resilient regions and the opportunity to deploy further capital into the UK rolling stock sector.

STRATEGIC TAKEAWAYS