Ardian closes second Americas fund on $2.1bn – exclusive

Paris-based fund manager Ardian has closed its latest Americas-focused infrastructure fund on $2.1 billion, exceeding its $2 billion hard-cap.

Ardian Americas Infrastructure Fund V secured commitments from more than 60 investors across 17 countries, “with a mix of returning investors, who on average doubled their previous commitments to the strategy, and new investors… [demonstrating] the growing appetite for Ardian’s Americas infrastructure and asset management strategies,” the firm said in a statement.

According to Mathias Burghardt, head of Ardian Infrastructure, a number of factors contributed to the successful fundraise, including the strong team the firm has built in the US over the past four years, the firm’s approach in partnering with industrial players, and its focus on digitalisation and decarbonisation.

“This strategy is in line with what people expect from infrastructure – resilience, inflation correlation, assets that are truly infrastructure, whose value comes not from financial markets but because of operational improvement,” Burghardt tells Infrastructure Investor.

Stefano Mion, co-head of Ardian Infrastructure Americas, adds: “It’s also that it’s a specialised infrastructure fund dedicated to the mid-market. You don’t find in the market a global team like ours, with the experience and long-standing track record we have, dedicated to the mid-market.”

According to Mion, individual ticket sizes will range from between $100 million and $300 million. Like its predecessor – Ardian Americas Infrastructure Fund IV, which closed on more than $800 million in May 2018 – AAIF V will invest in energy and transportation. However, it will also target telecoms, a sector Ardian had considered for the first fund, “but did not find the right opportunity [to invest in]”, Mion explains.

The portfolio of Ardian’s first Americas fund is heavily weighted towards energy, including renewables, battery storage, petrochemical storage, natural gas-fired generation and a transportation asset in Chile.

More than $400 million of equity has already been committed from AAIF V and co-investment for the acquisition of Unison, a buyer and manager of telecom site properties in the US. The transaction marks not only Ardian’s first telecoms investment in the US but is also an “evolution of the original strategy”, according to Mion.

“When we started our activity here, we were partnering with Europeans coming to the Americas. This time, we are also seeing American management teams wanting our help to develop a global platform starting from the US, asking for our support to move to Europe,” Mion explains. In the Unison transaction, Ardian will be partnering with the company’s management team, including its chief executive Dewey Shay, who founded the company in 2003.

While AAIF V’s geographic remit includes both North and South America, Mark Voccola, who along with Mion, is co-head of Ardian Infrastructure Americas, says “at least 85 percent of investments will be in the US or Canada. While we will still look at assets in Latin America, only up to 15 percent will be deployed in that region.”

‘A little bit for everybody’

Asked what impact the recently-passed Inflation Reduction Act will have on the US infrastructure market, Voccola replies: “I think across the sectors in which we invest, the Inflation Reduction Act has a little bit for everybody.

“Certainly on the renewable energy side, I think the most important thing is it gives certainty in that it establishes tax incentives for solar and wind projects for a decade,” he continues. “Historically, you’ve seen ebbs and flows in development as tax schemes ran their course. So, having a full decade there I think allows the development community to go out and plan efficiently and effectively to get more assets in the ground.”

In addition to renewable energy generation, the new legislation is also conducive to the development of standalone storage projects. “Not having to have the assets linked to a specific project, again, will make it easier to develop and I think you’ll maybe see more efficient, maybe innovative solutions on where to put that storage and have storage built, which will help with the intermittency of a lot of the renewable power that’s coming online,” Voccola comments.

He also believes that the legislation will provide incentives for PPPs in transportation, including airports, roads and bridges, and electric vehicle infrastructure.

“There are a lot of incentives across the infrastructure space that folks who invest in the sector will be able to take advantage of and will turn to us to do so.”