The Aston Martin DBX concept car, pictured at the St Athan facility alongside the Aston Martin DB5 and Vanquish
LGIM Real Assets, which manages £21.1 billion, confirmed in a statement on December 14 that construction work will now begin on the site in Wales, which is due to begin production in 2019 and employ 750 people in the region.
A person familiar with the situation said LGIM’s investment amounted to “circa £50 million”. LGIM is financing the construction, and will lease the plant back to Aston Martin once completed, with the rental income supporting Legal & General Retirement in its payment of pensioner incomes.
Fit-out of the new factory, a former Ministry of Defence site in the Vale of Glamorgan, will begin in late 2017, following the repurposing of the former aircraft hangars which has already begun. The site will manufacture Aston Martin’s new SUV, the DBX.
Asset managers have increasingly turned to real assets, such as infrastructure, as ways to provide stable, long-term income for institutional investors, in an environment of low bond yields and equity markets blighted by geopolitical uncertainty.
Also this year LGIM Real Assets, a division of £841.5 billion LGIM, has invested in the London Gateway Port, the UK’s first new port to be built in over two decades, situated on the Thames Estuary, and a fleet of new trains for the East Anglia rail franchise.
It also made its first infrastructure transaction in the US by backing the campus expansion of the University of California, Merced.
Kerrigan Procter, managing director of Legal & General Retirement, said: “It is the latest example of our commitment to real asset investments which deliver good quality long-term income and play a meaningful role to the UK economy.”
Aston Martin has a long-running association with James Bond, the fictional British special agent, dating back to the 1964 movie Goldfinger when it supplied 007 with the iconic Aston Martin DB5.
Its president and chief executive officer Andy Palmer, described the LGIM deal as “a milestone” in its 103-year history. He added: “Since taking the decision to build out first SUV in Wales we have been impressed with the commitment and approach from both the MOD and the Welsh Government in making this project work.”