Infrastructure: Conduit may bypass expensive bank lending

The UK Treasury is understood to be considering the establishment of a conduit-style fund that would source investment directly from institutional investors such as pension funds and insurance companies to fund its infrastructure investment programme. The UK government would own the conduit and take the first-loss risk in the vehicle. Management of the conduit would be outsourced to a third party – insiders suggest that one of the monoline guarantors is being considered. The conduit could be launched in the next three to six months.