Fundraising

AMP debt fund lends $200m to telecoms firm

The mezzanine investment comes from the manager’s recently closed third fund, which closed on its $2.5bn hard-cap.

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AMP Capital has lent $200 million in mezzanine debt to the US’s largest private owner of telecoms tower infrastructure, Vertical Bridge.

Vertical Bridge will use advances from the facility to support its growth over the next 18 months to two years, AMP said. The telecoms company owns or leases over 55,000 sites across the US including towers, utility attachments, rooftops and billboards that are then leased to US telecom carriers and other users of wireless technology.

“The facility for Vertical Bridge is designed primarily to support its future M&A activity,” AMP Capital infrastructure debt principal Patrick Trears explained.

The investment is coming from AMP Capital Infrastructure Debt Fund III, which closed in late August on its $2.5 billion hard-cap, targeting a gross IRR of 10 percent. In addition, the vehicle secured an extra $1.6 billion in co-investment capital through two separate $800 million co-investment pools: one from LPs in the fund and another from investors seeking access on a deal-by-deal basis.

IDF III was launched in November 2015 and received investment from 125 LPs across 12 countries. The largest pool of capital came from Japanese and Korean investors, with the former committing over $300 million and the latter, through a partnership with Mitsubishi UFJ Trust and Banking, investing over $700 million in the fund.

“We attracted a number of new clients from North America for IDF III, including commitments from some of Canada’s large pension funds,” Trears added.

The vehicle will be looking to make 10 to 15 mezzanine debt investments across OECD countries, typically between $100 million and $200 million each. Prior to Vertical Bridge, IDF III had already made four investments, one of which is believed to be its Skr1.47 billion ($169 million; €151 million) mezzanine debt injection in a Swedish district heating portfolio in May.

Europe and North America are expected to form the bulk of the fund’s dealflow, with further transactions in the renewables, telecommunications and energy distribution sectors being targeted.

IDF III, AMP Capital’s third infrastructure debt fund in five years, was launched less than a year after the $1.1 billion close of its predecessor.