AMP Capital Investors (AMP Capital), the Australian fund manager, has raised €241 million from 12 institutional investors at the first closing of its AMP Capital Infrastructure Debt Fund, which invests in the subordinated debt of “essential infrastructure assets”. The fund has a final target amount of €500 million.
“We are very pleased to achieve subscriptions of €241 million against the backdrop of what remains a very challenging fundraising market,” said AMP Capital global head of infrastructure debt Andrew Jones in a statement. “Demand has been strong from institutional investors in Asia, Europe, North America and Australia.”
He added that interest from Japanese investors had been sufficiently strong that the firm was now offering a yen feeder fund. It already offers US dollar feeder funds.
The fund is backed by a cornerstone commitment of an undisclosed size from China Life Insurance, the world’s largest listed life insurance company, alongside funds managed by AMP Capital. AMP and China Life signed a strategic partnership in 2009 to explore possible areas for partnership in pensions and asset management.
The fund is aiming to build a portfolio of investments in the subordinated debt of 10 to 15 companies headquartered in OECD countries offering essential services in areas such as water, gas, electricity, hospitals and transport. The statement said the fund would target “defensive assets with high barriers to entry, a regulated environment, highly visible cash flows and strong industry positions”.
It recently made its first investment in the form of a £40 million (€46 million; $65 million) high yielding loan to a UK-based rolling stock company specialising in the leasing of passenger trains and freight locomotives.
A number of debt funds have been launched in recent times, with evidence of their success or otherwise on the fundraising trail eagerly awaited. Earlier this month, Aviva-backed subordinated debt fund Hadrian’s Wall received a £50 million investment from the European Investment Bank as it moved closer to a scheduled first close in the first half of this year.
AMP Capital is a wholly owned subsidiary of AMP Limited, one of Australia’s largest retail and corporate pension providers. It began investing in infrastructure in 1988 when it participated in the financing of the Sydney Harbour Tunnel and now operates from offices around the world including London, New York and Hong Kong.
The firm is also currently raising an open-ended European equity fund. In a keynote interview in the April 2011 issue of Infrastructure Investor, Richard Shields, who leads the firm’s fundraising effort from London, said the challenges of the global financial crisis and consequent ramifications for institutional portfolios have made his task a tough one:
“We haven’t so far raised what we wanted, but there has been a significant amount [of capital] from Europe and parts of Asia, including Japan. So far we have a spread of investors across Europe, Asia and Australia,” he said.
“One of the challenges initially was awareness of AMP, which is taken for granted in Australia – but it’s pretty well known in Europe now, and we have a good foundation.”
The firm is also expected to announce soon the final close of its Asian Giants Infrastructure Fund, which targets opportunities primarily in China and India. The fund, which has a $750 million target, posted a first close on $95 million in March 2009, and it was announced earlier this year that it had raised a further $66 million in aggregate from a UK pension and a Japanese pension.