18 April 2016

Infrastructure Capital Group targets $1bn for asset purchases

Author: Mark Smith
Source: In Investment

Fund manager Infrastructure Capital Group (ICG) is looking to raise $1 billion from domestic and international institutional investors to add quality established infrastructure businesses and new development projects to its mid-market infrastructure portfolios.

The capital will be deployed across ICG’s $450 million Diversified Infrastructure Trust (DIT) and $1.1 billion Energy Infrastructure Trust (EIT), as well as separate accounts for institutional investors.

ICG chair Andrew Pickering said the firm believes there is fair value in the mid-market driven by asset recycling initiatives, strained government and corporate balance sheets, non-core divestments from corporates as well as steady organic growth opportunities.

“There are assets out there that are reasonably priced, with more coming to market, particularly in the renewables space,” Pickering said.

“The mid-market, often overshadowed by mega deals, remains less crowded and more receptive to firms that can demonstrate expertise in project development, and asset origination, ownership and strategic management.

“We don’t wait for all deals to come to market; we originate deals from the idea stage and work with development partners to structure them for commercial close. In the longer term, our investors and their members benefit from de-risking, growth and enhanced returns throughout the asset’s lifecycle.”

ICG global head of capital Peter Welch said the firm is engaged with domestic and international investors seeking specialist infrastructure asset growth and revenue via pooled funds and separate accounts.

To allow greater liquidity and flexibility, the firm has introduced to its once open-ended DIT and EIT terms a right for investors to redeem after an initial 10 year term, or roll for additional five year increments. The move effectively converts them to closed-end funds, Welch said.