Gatwick airport attracts South Korean state investment

Gatwick attracts: new investment and a new plan to woe passengers

South Korea's state pension fund has said it plans to buy a 12% stake in the newly-independent Gatwick airport.

A statement from the fund said it had signed an agreement with the new owners of the UK's second-busiest airport, Global Infrastructure Partners.

Gip, which is backed by Credit Suisse and General Electric, bought Gatwick airport for £1.51bn ($2.4bn).

News of the plan comes after Gip went on the offensive, saying it would compete hard for passengers.

Gatwick's main competition is with its London rivals Heathrow and Stansted, but it could also take customers from Manchester airport, which attracts a high percentage of leisure customers.

UK confidence

South Korea's state pension fund has already invested in UK property. Last year, it bought the HSBC headquarters in London's Canary Wharf financial district for £773m.

Analysts see the move as a welcome vote of confidence from an outside investor for the UK - at least in terms of its property and infrastructure.

A spokesman for the South Korean National Pension Fund was quoted in an interview with the Financial Times as saying: "We consider that investment in the United Kingdom represents a good buying opportunity."

South Korea's state pension fund is the world's fifth-largest.

Massive reserves

Separately on Tuesday, it was also revealed that South Korea's foreign exchange reserves reached an all-time high in January.

They totalled $273.7bn, a rise of $3.7bn from December.

Foreign currency reserves are seen as a useful buffer against a raft of financial problems.

Other countries with substantial holdings include China and Russia.