M&G Investments case study
In 2006, Infracapital acquired a minority stake in Associated British Ports (ABP), the UK ports owner and operator. We exited the stake in July 2015 and returned the proceeds to Infracapital clients.
ABP plays a strategically important role in the UK. In 2014, its network of 21 nationwide ports handled over 94.5 million tonnes of cargo, including 30 million tonnes for export. The firm and its customers support 84,000 British jobs and contribute £5.6 billion to the UK economy per year (click here).
ABP has a high public profile and from the outset of our investment we considered it vital that management have a strong focus on ESG policies and tight controls. We and our co-shareholders would give challenge to ABP’s ESG policies where appropriate. We maintained this governance oversight throughout our period of ownership and as an example ABP signed a new environmental policy in 2015. During the investment period we also worked with management to raise health and safety standards across the businesses and undertake extensive employee training.
Due to the nature of the business and the large volumes of commodities transported through its ports every day, ABP also places a great deal of emphasis on damage and pollution prevention. The company operates 5000 hectares of land and 87 kilometres of quay, which can accommodate the largest vessels in operation (abports trade sectors), so efforts to minimise pollution and prevent environmental damage were a key area of focus for our asset management team.
ABP works with its local communities and trading partners to ensure the safe handling of cargo, prevention of pollution to land and sea, and sustainable construction and maintenance works.
The company is also active in managing the physical impact of its operations. It procures or creates enough green electricity to cover the entire operational needs of the group, recycles or recovers 80% of its waste and seeks to enhance biodiversity where possible. Recent projects include the rehoming of water voles in the Solent and installing beehives and swift nesting boxes in south Wales.