Competition in the London airport market is heating up, and that may be enough of an exit strategy for a major investment fund that holds nearly half of Gatwick Airport. That GIP is contemplating putting its 42 percent stake up for sale may complicate Gatwick's request with the British government to add another runway.
Investment fund Global Infrastructure Partners is considering the sale of its 42 percent stake in London’s Gatwick Airport, according to people with knowledge of the matter.
The fund plans to initially seek buyers for its stake among existing shareholders before reaching out to other potential suitors, the people said, asking not to be identified as the information is confidential. Financial advisers have contacted New York-based GIP about a possible sale, though it isn’t clear if any banks have been hired, they said. No final decisions have been made and the fund may decide not to proceed with a transaction, the people said.
Representatives for GIP and Gatwick declined to comment. While GIP is the largest shareholder in the airport, its other owners include funds from Abu Dhabi, California and South Korea, according to its annual report.
GIP, which manages about $40 billion in assets, bought London’s second-busiest airport with the consortium of investors in 2009 for about $2.5 billion. Gatwick has been under pressure due to intensifying competition from at least two other airports in the city after Heathrow, Europe’s busiest airport, and Stansted, the biggest hub for Ryanair Holdings Plc, this year said they could add almost 30 million more passengers between them yearly without requiring extra runways.
Gatwick has a single landing strip and was able to handle 45.6 million passengers in 2017. Heathrow, which has been effectively full for a decade, is in the middle of a consultation period to add a third runway after getting the green light from Prime Minister Theresa May’s administration in 2016. Gatwick meanwhile is continuing to lobby the U.K. government for permission to also add another runway, with Chief Executive Officer Stewart Wingate saying in October that the airport would privately finance its own growth.
GIP, founded in May 2006, manages assets ranging from ports and pipelines to multiple airports and a vast wind farm in the North Sea. Over 10 years, GIP has expanded its roster of backers to include some of the world’s biggest sovereign funds and a slate of U.S. pensions.
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Photo credit: An ownership stake comprising nearly half of Gatwick Airport, where this Norwegian Air jet is parked at the gate, is up for sale. Ed Webster / Flickr