Kuwait’s sovereign wealth fund is set to sell a near 40 per cent stake in its North Sea energy business to JPMorgan’s asset management arm, just four months after it paid £1.3bn for the collection of major pipelines and terminals.
Wren House, the London-based infrastructure arm of the Kuwait Investment Authority, bought the North Sea Midstream Partners business in July including the St. Fergus Gas Terminal in Scotland and the Teesside Gas Processing Plant.
But it has since moved to sell a minority stake in the business believing recent gas finds in the North Sea — including Total’s bumper discovery west of Shetland in September — have increased the value of the assets, which also includes a majority stake in the Shetland Island Regional Gas Export System (SIRGE) pipeline.
JPMorgan Asset Management is now on the verge of agreeing a deal for an approximately 40 per cent stake in the business, which will value it at close to £1.5bn, according to people familiar with the talks.
The deal, which could be completed within days, would earn Wren House an £80m return on its initial investment in a little over four months.
The KIA is the world’s fourth largest sovereign wealth fund, managing almost $600bn, with Wren House already acquiring stakes in UK infrastructure such as London City Airport and Thames Water.
Spokespeople for JPMorgan Asset Management and Wren House declined to comment.
Private equity giant KKR and Singapore’s sovereign wealth fund GIC were also involved in talks, the people familiar with the deals said, before Wren House agreeing to push ahead with JPMorgan.
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