18 April 2016

Infrastructure Capital Group targets USD769 million for mid-market assets

Source: The Asset

Specialist Australian fund manager Infrastructure Capital Group (ICG) is targeting A$1 billion (US$769 million) 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 A$450 million Diversified Infrastructure Trust (DIT) and A$1.1 billion Energy Infrastructure Trust (EIT), as well as separate accounts for institutional investors.

ICG chair Andrew Pickering said the firm believes that 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 says. “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. Most deals we complete are proprietary, which speaks to our expertise, agility, speed and experience. Our patient and cost conscious approach preserves capital for the right deals with better odds of success.”

“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,” Pickering says.

ICG Global head of Capital Peter Welch says 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, we’ve introduced to the once open-ended DIT and EIT terms a right for investors to redeem after an initial ten year term, or roll for additional five year increments, effectively converting them to closed-end funds,” Welch says. “We are certainly seeing more interest from investors to partner with ICG to build bespoke exposures and partnership programs, which is presenting exciting investment opportunities.”

ICG has invested in 24 assets across all subsectors of infrastructure. More recent transactions include Port Hedland International Airport, in partnership with AMP Capital, and the Hallett 4 wind farm in South Australia.