AMOAI’s infra debt fund reaches ¥30bn at second close – exclusive

The Tokyo-based asset manager has already approved the deployment of ¥11bn in renewables and downstream energy projects in Europe and South America.

Tokyo-based Asset Management One Alternative Investments has reached a ¥30 billion ($270 million; €240 million) second close for its sophomore infrastructure debt fund, Infrastructure Investor has learned.

Jack Wang, a fund manager at AMOAI, told Infrastructure Investor that the company’s Cosmic Blue PF Lotus FCP-RAIF vehicle had recently received a ¥10 billion commitment from a Japanese institution, but declined to name the investor.

Wang said the vehicle was aiming to raise a total of ¥100 billion by November, and that it may hold a third close between June and September.

The fund was launched last November, and held a first close when Dai-ichi Life Holdings, one of the biggest insurance companies in Japan, committed ¥20 billion.

Wang said it was investing in floating-rate loans in developed and emerging markets in order to achieve average returns of 200 basis points above the base rate across its portfolio.

He added that AMOAI had already approved the deployment of ¥11 billion in renewables and downstream energy projects in Europe and South America.

Referring to one of the downstream assets, in an emerging South American country, Wang said it had the right mitigation and credit enhancement measures: “They matched our guidelines for going to emerging markets. We felt comfortable with the risk.” However, he declined to provide further details on the investments.

Speaking about investing in OECD countries, he said margins had decreased for more liquid products, such as rated project bonds, because of the high levels of liquidity in the market.

“We are trying to get a premium by investing in more illiquid and non-rated projects,” he said. “That requires our team specialty, which is to do our own due diligence on these projects. We are focused on the floating-rate loans space, [which is] still dominated by banks rather than institutional investors.”

Wang revealed that the fund is already out of the J-curve and generating returns for investors because it deployed capital “quite early after the launch”.

“The total income generated has been able to cover operating costs and the set-up cost of the fund, and we are basically in the positive,” he said.

The yen-denominated vehicle is expected to invest in 15 to 20 projects, with the average ticket size ranging between $10 million and $60 million.

AMOAI was established last June when Mizuho Bank agreed to sell Mizuho Global Alternative Investment to Asset Management One, a Japanese fund manager with more than $475 billion in AUM.

MGAI launched its first infrastructure debt fund, Cosmic Blue PF Trust Lily, in 2016. The fund closed on ¥33 billion in August 2017.