South Korea National Pension Service Takes 12 Percent Stake in Gatwick Airport

The South Korea National Pension Service is now set to take a 12 percent stake in Gatwick Airport worth about £100 million. This deal could be completed as early as next week and comes as part of a sweeping international expansion program by the world’s fifth biggest pension fund.

Just last year, South Korea’s National Pension Service bought the headquarters of HSBC in Canary Wharf for £773 million in cash. The group says it aims to expand its overall portfolio from $240 million to $400 billion by 2014.

The South Korea National Pension Service chairman, Jun Kwang-Woo, said that the fund is hoping to raise its investment in Britain. Right now Britain only makes up 1.3 percent of its portfolio. He went on to say that some infrastructure-related investment ahead of the London Olympics in 2012 could be very interesting and could generate some momentum. The regulatory framework is very stable and reliable.

Gatwick Airport is Europe’s eighth busiest airport measured by traffic. The airport itself handled 34 million passengers in 2008. The airport was bough last November by Global Infrastructure Partners, as the infrastructure fund was backed by Credit Suisse and General Electric, for £1.51 billion. Bank financing supplied 45 percent of the purchase price.

Mr Jun went on to say that their investment strategy for now and for the foreseeable future is to look for possibilities to join forces with big international players. This could lead to big things for South Korea National Pension Service. On that same note, the interest in Gatwick Airport shows that the UK property continues to be attractive to international groups.