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AMP Capital fund enters China with gas deal

The Australian fund manager’s Asian Giants Infrastructure Fund has acquired its first asset in China through the purchase of a stake of just over 19% in Qujing Gas. The fund has also attracted $66m of new commitments and is targeting a final close in Q1 2011.

Asian Giants Infrastructure Fund (AGIF), which is managed by Australia’s AMP Capital, has made its first move into China with the acquisition of a 19.11 percent stake in Qujing Gas, which holds a 30-year concession to run the gas distribution franchise in Qujing City, the second-largest city in Yunnan province in Southern China.

AMP Capital did not disclose the size of its initial investment, but said that it would ultimately be expecting to invest $20 million in the business.

“The Chinese Central Government has set a target of increasing gas consumption from 4 percent [of total energy consumption] to 9 percent by 2020,” said Xiao Wei, AMP Capital’s co-head of Asian infrastructure, in a statement. “Our investment also positions us to take advantage of opportunities to invest in gas distribution growth in other areas of China.”

Qujing is the first city in Yunnan province, which has a population of 45.5 million, to have a piped natural gas supply.

AMP Capital has been investing in Asian infrastructure since 1994 and has teams on the ground in Beijing and Mumbai. AGIF is aiming to invest 70 percent of its capital in China and India with the rest set aside for other markets such as Hong Kong, Korea, Malaysia, Singapore and Taiwan.

The same statement said that AGIF, which previously announced a $95 million first close in March 2009, had secured its first commitment from a UK public authority pension fund as well a commitment from a Japanese pension fund. In total, these two commitments were worth approximately $66 million.

It also said that a final close of the fund was expected in the first quarter of this year.