Pension funds and specialist investors have agreed to a £66.3m deal for 10 per cent of debts linked to the M25 motorway expansion, The Telegraph has reported.

Four years after the addition of extra lanes to London’s motorway was completed, funds and investors, including Dalmore Capital (an independent fund management company), have teamed up to take over from the engineering firms that built and maintain the extended motorway.

The firms have acquired a 10 per cent portion of the private finance initiative (PFI) debt. The M25 development is one of the biggest PFI-backed programmes in Britain.

Contractors were unsuccessful in refinancing their £1.3bn debt linked to the M25 expansion and so had no choice but to sell.

Along with Dalmore, the consortium which now owns most of the debt linked to the M25, includes US hedge fund GCM and infrastructure specialist Equitix.

Last year, Dalmore Capital was part of the consortium that won the auction to back the £4.2bn Thames Tideway Tunnel project.

Despite previous difficulties in relation to investing in public projects, Chancellor Philip Hammond noted last month that pension funds will be largely involved in future infrastructure developments, however, the structure still remains unknown.

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