MONACO PENSION FUND
CONSTRUCTION / SALE & LEASE BACK
PanEuro specializes in the financing of large construction projects and the acquisition of long-term low-risk assets; designed to generate reliable passive income streams and long-term yields.
PanEuro identifies and structures 20 to 40 year investments for the Monaco Pension Fund Syndicate (MPF) using a Triple Net Lease structure.
Monaco
PanEuro is authorized to originate and structure investments for the MPF Syndicate under mandate.
MPF is the lead investor of a globally diversified consortium of private equity investors, including leading North American, Scandinavian pension funds. For each investment MPF will invest between 5% and 20% of its own capital to cornerstone the “MPF Syndicate”.
Operating exclusively on a 100% equity basis, the MPF Syndicate targets high value premium projects and assets between USD $100 million - $3 billion.
This equity-only approach eliminates the need for traditional debt financing, ensuring greater flexibility for asset lessees and stakeholders.
Two Common Funding Scenarios
MPF will 100% finance the acquisition of an existing asset and lease it back with nil change to management or operations.
MPF will 100% finance 100% of the construction of a new asset, and lease it to an investment grade lessee.
Companies
MPF can release substantial capital from passive low-growth assets of companies. This capital can then be reinvested in higher-profit areas. Assets can also be leased back at competitive long-term rates. The increased liquidity can enhance a company’s rating and creditworthiness with lenders and suppliers.
All payments back to MPF must be guaranteed by an investment grade payer or underwritten by an investment grade insurer.
If an investment term is shorter than 20 years, higher yields are required to amortize the capital over a shorter period.
Governments
MPF’s structure enables governments to shift their focus to essential service delivery rather than tying up funds in low-yielding assets. By selling assets and leasing them back at favourable rates over long terms (20 - 40 years), governments can release capital for deployment in priority areas such as public housing and infrastructure.
Principal Protected, Date Certain,
Non-Contingent ROI for the Full Term
MPF cornerstone each pension fund investment syndication to provide 100% finance of large projects, including the construction period for new builds, for terms of up to 40 years.
The structure of the financing is in the form of a Triple Net Lease with an annual inflation accrual.
The MPF is the Lessor.
The Lessee must be rated investment grade by S&P Ratings (BBB- or above) and/or Moody’s (Baa3 or above).
The lease rental payment is a low-cost payment comprising of the amortized principal over the term and a marginal interest rate typical of a large public pension fund.
Unlike a bond there is no bullet or principal repayment at the end of the term and MPF charges no long-term costs.
The Government or Company accrues ownership in the asset during the term of the lease via a SPV (Special Purpose Vehicle) to 50%
The Lessee can buy MPF out of its 50% shareholding in the asset(s) at anytime subject to a pre-agreed shareholders agreement.
Sale and Leaseback of Existing Assets for Debt Reduction & Access to Capital
The sale and leaseback of large assets is a strategic financial tool that governments and investment grade companies can utilize to raise capital and reduce debt without completely relinquishing control over critical infrastructure or properties. In this arrangement, the government sells an asset, such as a government building, factory, transportation system, or utility, to the MPF Pension Syndicate and simultaneously leases it back for up to 40 years. This approach offers several compelling benefits:
Immediate Capital Injection: The sale generates a significant lump sum of cash, which can be used to pay down debt, fund new infrastructure projects, or address budget shortfalls. This provides immediate fiscal relief without raising taxes or cutting essential services.
Debt Reduction: By using the proceeds to pay off high-interest debt, the government or company can improve its balance sheet, reduce interest payments, and enhance its creditworthiness. This can lead to lower borrowing costs in the future.
Retained Operational Control: The leaseback component ensures that the government or company retains use of the asset, allowing it to continue operating without disruption. This is particularly important for critical infrastructure that supports economic activity or public welfare.
Efficient Asset Utilization: Sale and leaseback can unlock the value of underutilized or non-core assets, allowing the government or company to focus resources on higher-priority areas.
Economic Stimulus: For governments, the influx of capital can be reinvested into the economy through infrastructure projects, job creation, or other initiatives that stimulate growth and improve public services.
Important Information - PanEuro operates through the use of Special Purpose Vehicles (SPVs) for each investment and project. These SPVs are established on a case-by-case basis and are tailored to the specific legal, regulatory, and commercial requirements of the jurisdiction and nature of the transaction. This structure is designed to ensure efficient and compliant execution of PanEuro’s investment strategy across different markets.
Details about PanEuro’s operations and structures are available upon written request, provided the disclosure does not breach any obligations under binding confidentiality or non-disclosure agreements.