Royal London is to acquire UK-based infrastructure asset manager Dalmore Capital for an undisclosed sum.

The deal remains subject to regulatory approval.

Under the deal, Royal London will commit up to £500m to future Dalmore funds.

Dalmore specialises in long-term core and core plus infrastructure investments. It has around 130 infrastructure assets in its portfolio, broadly diversified across different sectors, primarily in the UK but also in Europe and Canada.  

The infrastructure asset manager currently manages approximately £6bn of capital sources from institutional investors.

Assets include the Thames Tideway Tunnel, as well as 24 operational wind farms in the UK with total capacity of 562MW and a portfolio of run-of-the-river hydro generation projects in Scotland.

Royal London said the acquisition would support its strategy to broaden its private asset capabilities and provide customers with a wider range of investment options.

Barry O’Dwyer, group CEO of Royal London, said: “By acquiring Dalmore Capital, we can offer our individual and workplace pension savers access to the long-term, stable returns that infrastructure investments can potentially provide. Additionally, it demonstrates our commitment to invest in assets that support the UK’s drive for economic growth and an innovative, sustainable future.”

On completion of the acquisition, ownership of Dalmore Capital and its asset servicing arm, Resolis, will transfer to Royal London Asset Management.

Dalmore Capital will operate as a stand-alone infrastructure capability within Royal London Asset Management.

Michael Ryan, CEO of Dalmore Capital, said: “We are delighted to be partnering with Royal London in the next stage of our growth. This transaction is a strong endorsement of the team at Dalmore, our track record, and the prospects for investing in UK infrastructure.”   

BNP Paribas, PwC, Longspur and Herbert Smith Freehills served as financial and legal advisers respectively to Royal London and Royal London Asset Management. 

Rothschild & Co and Slaughter & May served as financial and legal advisers respectively to Dalmore Capital.