Antin targets energy following €515m second close

Paris-based Antin Infrastructure Partners has switched its focus from transport to energy as it seeks to take advantage of improving opportunity in the latter sector. Antin, which is sponsored by BNP Paribas, posted a second close of its €1bn-target fund on €515m in late December.

Antin Infrastructure Partners (Antin), which moved past the halfway mark last month as it seeks to raise €1 billion, revealed in a media briefing in London this morning that energy assets are currently its primary focus. The fund has so far invested €240 million from the fund in four deals, the first three of which were in the transport sector. However, the firm’s recently signed fourth deal – a 33.3 percent stake in French oil storage company Pisto – may be more indicative of things to come.

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Alain Rauscher, chief executive of Antin, said: “We love energy and, by the end of this year, the fund will have more of a transport/energy balance. We’ve seen energy deals gradually meeting our pricing criteria, and 80 percent of our current pipeline is energy deals.”

Reflecting on why the firm had not been active in the space until now, Rauscher said: “When we launched the fund [in January 2009] we thought there would be a good opportunity in energy but we didn’t think it was the right time. Large energy companies were big buyers themselves and prices were high. But we could see there would be pressure from the EC regarding the strategies that these companies were implementing and we could also see the oil price coming down.”

Rauscher added that because asset-hungry utilities were keen to grow aggressively outside their home markets, they had a strategic mindset rather than a returns-focused mindset. With some deals being done at “ridiculous price levels” it meant that infrastructure funds “were not able to compete”. Since then, utilities have come “under equity pressure and credit rating pressure to improve their balance sheets”, sparking a series of disposals. The EC has also forced the unbundling of energy infrastructure assets to stimulate greater competition.

Renewable energy is seen as attractive, partly due to reduced competition*. Says Rauscher: “A lot of entrepreneurs went into renewable energy and did all the hard work, got all the consents and built some critical mass. Then you had a wave of activity where the utilities wanted to build renewable energy platforms and bought from the entrepreneurs at very high prices. Now the utilities have got the platforms and are not interested any more. And some, which have experienced difficulties, are selling at sensible prices.”

Also at the media briefing, Antin officially announced the second closing of its Antin IP fund on €515 million. The fund has raised €300 million from its sponsor, BNP Paribas, and €215 million from ten other investors – including five pension funds and three insurance companies – in Scandinavia, Germany and France.

The firm, whose placement agent is Paris-based Global Private Equity, says it will be extending the fundraising from Europe to the US, the Gulf countries and Australia and that it remains confident of reaching its €1 billion final target. Rauscher said he expected a third close by the end of the first quarter of this year on an amount “substantially larger” than that raised at second closing.

*Look out for the February 2010 issue of InfrastructureInvestor magazine, which will be running a series of in-depth features on the opportunities and challenges facing LPs keen to gain exposure to green infrastructure assets.