Royal London in talks to buy Thames super-sewer investor Dalmore

One of Britain’s leading financial mutuals is in talks to buy Dalmore Capital, the infrastructure investor which owns a stake in the Thames ‘super sewer’.

Sky News has learnt that Royal London is among the suitors circling Dalmore, which began exploring a sale earlier in the autumn.

Royal London’s interest is serious but has yet to result in a binding offer, according to infrastructure industry sources.

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Other parties are also understood to have expressed an interest in buying Dalmore, they added.

If Royal London proceeds with a deal, it would reflect the growing push by traditional asset managers into so-called alternatives such as infrastructure.

BlackRock, the world’s biggest fund manager, recently swooped to buy Global Infrastructure Partners (GIP), the former owner of London’s Gatwick Airport.

RLAM, Royal London’s asset management arm, runs over £170bn of clients’ money.

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Dalmore is much smaller than GIP, with £6bn of assets under management, but is well-regarded in the sector and has a high-profile portfolio of assets.

Among them are 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; Cory, the waste-to-energy giant.

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.

A person close to Dalmore said 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.

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Dalmore is majority-owned by its founders, with GCM Grosvenor also a shareholder.

Estimates of its value vary, although some market sources suggested it could be in the region of £100m.

Royal London and Dalmore both declined to comment.