Press release 17 August 2016

Legal & General backs first U.S. infrastructure deal with University of California, Merced

Legal & General has agreed its first infrastructure transaction in the U.S. as part of a strategy to target real asset deals which provide high quality long-term returns to match pension liabilities.

Legal & General has agreed its first infrastructure transaction in the U.S. as part of a strategy to target real asset deals which provide high quality long-term returns to match pension liabilities. The transaction builds on Legal & General's fast-expanding U.S. activities and supports plans to invest in infrastructure, direct investments and urban regeneration projects where in the UK £8 billion has been invested out of a medium-term target of £15 billion.

The transaction is the first ever educational sector public-private partnership to take place in the U.S. The financing will help to nearly double the size of the University of California, Merced, campus to accommodate 10,000 students and expand its research and teaching programmes. Legal & General Retirement (LGR) is providing a c. $100m in a 38-year facility (Moody's: BBB1) as part of a total c. $660m from other lenders.

Legal & General is well established in the U.S. with three businesses: term assurance through Legal & General America (LGA), asset management through Legal & General Investment Management America (LGIMA) and its pension risk transfer business Legal & General Retirement America (LGRA). LGA, based in Maryland, is the 10th largest provider of term life assurance, by annual premium equivalent, in the U.S. and remains the 3rd largest provider through the key distribution channel of brokerage general agents with over $1.1 billion of gross premium revenue in 2015. In Chicago, LGIMA has more than $134 billion of assets under management and specialises in fixed income, liability driven investment (LDI) solutions and index capabilities for the U.S. institutional market. LGRA, based in Connecticut, is writing pension risk transfer (PRT) deals, helping U.S. defined pension schemes de-risk their liabilities.

Kerrigan Procter, Managing Director of LGR, said: "This first infrastructure deal in the U.S. shows the growing number of tools in our box to ensure we secure long-term returns to match our liabilities. We continue to be drawn towards social infrastructure and it doesn't get more attractive than this when the underlying asset is being developed for one of the world's leading universities."

Charles-Henry Lecointe, Senior Infrastructure Investment Manager, LGIM Real Assets, added: "This first-of-its-kind U.S. public-private deal demonstrates our ability to source high quality infrastructure transactions. We have built up a strong track record in this space and continue to target transactions backed by economic and social infrastructure as part of Legal & General's wider approach to real asset investments."

The extension of the University of California, Merced, campus will comprise 1.2 million gross sq ft of academic, classroom and laboratory facilities, as well as housing, dining and administrative offices, recreational facilities, utilities and infrastructure. The development will have a total one-time impact related to its design and construction, including direct and ripple effects, estimated at approximately $1.9 billion in the region - and $2.4 billion state-wide. By 2022, the on-going operations of the project will increase spending by over $200 million per year in the State.

The University of California is one of the largest public universities in the world and the largest public university system in the U.S. with 10 campuses, six medical schools, five academic medical centres and three national laboratories. In the Autumn 2015, full-time equivalent student enrolment totalled over 252,000 students; the University also employed 145,000 full-time equivalent faculty and staff; 206,000 students applied for admission for Autumn 2016.

University of California, Merced is strategically located in the San Joaquin Valley, near Yosemite National Park. Situated in a fast-growing region, the campus is greatly enhancing economic opportunity, levels of educational attainment and quality of life, while conducting life-changing research into society's most challenging problems.

The project consists of 13 buildings and will be delivered in three phases between 2018 and 2020. The development is being delivered by leading public-private partnership developer Plenary Group and contractor Webcor. Goldman Sachs arranged the financing of the transaction.

For further information, please contact:

Tom Gough

Head of Communications, LGIM Real Assets

020 3124 2777

Richard King

Head of Group Corporate Communications, L&G

020 3124 2095

Notes to editors:

Legal & General Group Plc:

Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of c. £12.7bn (as at 12 August 2016) and LGIM alone is responsible for investing £842bn worldwide (as at 30 June 2016) on behalf of investors, policyholders and shareholders. Legal & General has over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2015, Legal & General's operating profit (on the IFRS basis) was £1,455m and adjusted earnings per share were 18.58p for the period, an increase of 14% and 11% respectively.

For more information on Legal & General, please see

Legal & General Retirement

One of Legal & General's three major asset-based businesses, Legal & General Retirement (LGR) is responsible for £51bn of annuity assets (as at 30 June 2016). LGR has been an award-winning participant in the UK pension de-risking market for nearly 30 years, and has recently extended its operations into the US and the Netherlands. LGR provides pension annuities on an individual and bulk basis and is a major investor in long-term assets to match those liabilities. Landmark transactions include the $900m deal with Philips in the US in partnership with the Prudential Insurance Company of America in 2015, the £3bn bulk annuity arrangement with the ICI Pension Fund, the largest bulk annuity policy arranged by a pension scheme in the UK to date, secured in March 2014, the UK's largest medically underwritten deal for £230m with Kingfisher in December 2015 and the £3.2bn longevity insurance transaction with the BAE Systems 2000 Pension Plan in February 2013.

Legal & General offers a range of de-risking solutions, which includes buyout, buy-in, longevity insurance and liability-driven investment (LDI), to pension schemes of all sizes. Legal & General is also able to tailor a combination of LDI and longevity insurance to provide "DIY buy-in" solutions. Legal & General has expertise in investment management, all aspects of defined benefit provision as well as an in-depth understanding of mortality trends and longevity risk. The excellent services we are able to provide also include payroll, administration and communications services. LGR is multi award winning business, and in 2016 has been awarded: UK Pensions Awards - De-risking Provider of the Year, aiCIO's European Innovation Awards - Swap and Buy-in Provider of the Year, and European Pensions Awards - Buyout Firm of the Year.

LGIM Real Assets:

LGIM Real Assets is a division of Legal & General Investment Management (LGIM), one of Europe's largest institutional asset managers and a major global investor. LGIM manages £842bn in assets on behalf of over 3,200 clients (as at 30 December 2015), providing products and solutions spanning all asset classes. LGIM Real Assets, headed up by Bill Hughes, has AUM of £18.4bn (as at 30 June 2016) and is responsible for the division's direct investment capabilities in property and infrastructure. LGIM Real Assets is made up of three specialist divisions, Legal & General Property (LGP), its property fund management arm, LGIM Infrastructure, its specialist infrastructure lending and investment division, and Commercial Lending Limited (CLL), its commercial lending arm.