Founded 1995 | ||
Innisfree Ltd is a fund management company based in the United Kingdom which manages substantial interests in private finance initiative (PFI) schemes in the UK, Canada, Sweden and Holland. It invests funds in social infrastructure projects, such as hospitals and schools, on behalf of institutional investors such as local authority pension funds. The company has a portfolio of 58 projects with a capital value of £18.9 billion.
Contents
Role
The company was founded by David Metter in 1995 and has raised over £2.3 billion to date for investment in social infrastructure assets. It has over £1.7 billion under management in four long term income funds. These funds have lives of 35 years or more which matches the length of a typical PFI contract of between 25 and 30 years and reflects Innisfree's policy to remain a long term partner in these projects.
The majority of Innisfree's investors are UK institutions with 30% of funds from overseas. Over 80% of Innisfree's commitments are to UK projects with the remainder located in Canada, Holland and Sweden.
The role of equity providers such as Innisfree in PFI projects is to ensure the delivery of public services infrastructure to a standard as set out by the public sector with financial penalties for non-performance. Payment is only made once a facility is delivered and when the facility is operating as contractually stipulated. The PFI unitary charge includes payments to cover the cost of capital expenditure, the services needed to run and repair that asset and, in certain circumstances, supporting soft services. If a project is built using conventional procurement, these future costs for services are not automatically covered, monitored or disclosed.
Criticism
There has been much criticism of the PFI concept since its inception with Innisfree attracting some of this attention. According to the Daily Telegraph the company has been involved in many of the most controversial PFI schemes. Its profit margin in 2010/11 was 53 per cent.
In July 2011, Jesse Norman MP set up a campaign to obtain a rebate from PFI providers and Innisfree was one of the companies targeted. Norman said Innisfree has “made more money for less work than any other group of people I can think of”.
In March 2013 there were protests outside the company's offices in London by protestors who claimed the company's PFI deal was leading to the forced closure of A&E and other facilities at Lewisham Hospital and to privatisation of the NHS.
National Heath Service
The company is the largest external investor in NHS hospitals. Innisfree's health projects include:
Defence
The Allenby/Connaught barrack renewal programme, at £12 billion, is one of the UK's largest PFI projects. The 35-year contract with Aspire Defence was let in 2006. It involves servicing and refurbishment of buildings on 800 ha of army land around Salisbury Plain and in Aldershot. Aspire Defence Limited is 37.5% owned by "funds managed by Innisfree"; the other shareholders are InfraRed Capital Partners (17.5%) and KBR (45%). It is involved in joint ventures with Carillion.