Fundraising

ADIC-UBS Infrastructure Fund I raises $250m

The joint venture between Abu Dhabi Investment Company and UBS Global Asset Management is raising a $600m fund to invest in infrastructure development in the MENA region. Research by the two firms predicts soaring government infrastructure spend in the region.

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Middle Eastern investment firm Abu Dhabi Investment Company and Swiss asset management giant UBS have raised $250 million for the first close of the ADIC-UBS Infrastructure Fund I.

The fund, jointly managed by the two firms, is targeting commitments of $600 million for its final close. It will invest in transport networks, power, water, education and health facilities.

MENA: $400bn of infrastructure spending planned

“Most of the fund's investments will be in 'greenfield' assets, but because we are talking primarily about government concessions or long-term contracts with solid partners, cash flows are predictable and the risks less than in pure private sector deals,” Vincent Gilles, chief investment officer of ADIC-UBS Infrastructure Investment, said in a statement.

“The Middle East is often seen as a source of capital but we want to highlight to investors that there are also great investment opportunities here,” Mark Thompson, chief executive of ADIC-UBS Infrastructure Investment, said.

He added that infrastructure in the region is still being developed and “there’s a massive need for equity”. Governments in the MENA region are looking to spend large sums on infrastructure development and research commissioned by the ADIC-UBS Infrastructure Fund indicates that more than $400 billion of spending is planned for the next decade, the statement noted.

ADIC-UBS Infrastructure Investment is a 50:50 joint venture formed by the two firms in February 2008. It is planning to launch new funds over a three year period, including a second infrastructure fund which will raise up to $1 billion.