Profiting from PFI deals

amcluesent

The TV programme last night (14 Aug) suggested that the PFI contracts were a license to make money, basically 30 year contracts to exploit the public sector.

What's the best way for shareholders to get in on this?

The programme mentioned HSBC Infrastructure Company Limited, which I think is LSE quoted as "HICL" which has an "initial portfolio of up to 15 infrastructure projects in the government accommodation, health, transport, training and education sectors".

The other company was Innisfree, but they only seem to work with institutional investors. Any ideas how private clients can invest?

lswwong

The answer is: there isn't a way in. The "Project Company" is normally a joint venture special vehicle formed by consortium companies and not open to private investors.

I work in a part of a national law firm that specialises in advising PFI deals ranging from concession agreements to project finance agreements.

cheerfulcat

John Laing specialise in PFI. A lot of companies in the support services sector do PFI work, as well, but are unlikely to be part of a consortium ( JL is ). A lot of the bigger construction companies are involved too.

lswwong

There are really rather of a lot of companies involved in various aspects of PFI. For example, the facilities management sector e.g. Ecovert FM. Interserve is another one.

The way I see it, it is less likely that one can invest directly personally into PFI. It is, of course, possible to buy shares in the main contractor companies such as Amey but PFI work would only be part of Amey's overall porfolio.

Of the banks that are active within PFI, RBS, HSBC and Barclays are the ones that are well known to the UK public. There are other less well known specialist lenders that are active. Infranews (https://www.infra-news.com - registered users only) lists and is sponsored by all the main players in PFI.

baldbloke_2

amcluesent wrote:

The TV programme last night (14 Aug) suggested that the PFI contracts were a license to make money, basically 30 year contracts to exploit the public sector.

What's the best way for shareholders to get in on this?

QUOTE]

Were you not even a tiny bit uncomfortable when preparing to ask this question? Are you not hoping to benefit from their legal but possibly unethical processes?

amcluesent

>Were you not even a tiny bit uncomfortable...<

The fool Blair and his cronies have signed the contracts, as a UK taxpayer I'll be fleeced as a result of Brown's wheeze to cook the public sector books :mad:. Might as well get something back

Chrismaths

Are you not hoping to benefit from their legal but possibly unethical processes?

I've never liked ethical funds, and this is one reason why. One person's ethical is another's unethical. I can't see how it is possible to view PFI as unethical - it's expensive for the taxpayer, but that's not the company's fault - they are providing a service that the Government has asked for. It would be unethical for them not to make profits, as that would be a breach of their duties to their shareholders.

Depending on your moral standpoint, investing in anything can be deemed unethical. If you're a muslim, then paying or receiving interest is unethical - so that rules out just about every company in Britain, who will have debt of some kind and receive interest on their cash. If you're a Marxist, then property is theft, so all money is unethical!

I'd really like to set up a UK vice fund, with the filtering criteria that it must be excluded from at least one other ethical fund. I reckon it would do really well - tobacco, gambling, pornography (ok - not many listed pornographers, but there's always the Daily Mail...), Oils. Fantastic.

baldbloke_2

Chrismaths

I don't think ethical was the correct word for me to use.

It was the extraction of the detail from the programme and the unseemly (to me!) haste with which amcluesent saw this 'exploitation' as an opportunity for personal gain that caught my eye.

"30 year contracts to exploit the public sector.

What's the best way for shareholders to get in on this?"

I agree of course about the use of words such as ethical and moral as applied in this context. Such personal standards as we have are difficult enough to translate in to one's own day to day activities let alone asking others to understand,accept and live by them. More's the pity!


One word frees us of all the weight and pain of life: that word is Love - Sophocles