Australian fund of funds Infrastructure Partners Investment Fund is undertaking a capital raising of A$100 million ($68 million; €62 million) to fund increased commitments to its existing vehicles.
The move comes after the firm appointed Jonathan van Rooyen chief investment officer. Van Rooyen had previously been executive director at Hastings Funds Management.
IPIF made a commitment to its fourth fund this year, adding Macquarie Infrastructure and Real Assets’ The Infrastructure Fund to its portfolio. It made its commitment in May before its capital was called by MIRA in July.
IPIF founder and chief executive Nicole Connolly said it was TIF’s asset base that attracted it to the fund because it was similar to that held in Utilities Trust of Australia, another of IPIF’s funds.
“Currently there are some restrictions on adding any more of our capital into UTA [and] we felt that TIF represented a good chance to get more exposure to assets that we already had,” she told Infrastructure Investor.
As well as the Morrison & Co-managed UTA, IPIF also has commitments to AMP Capital’s Diversified Infrastructure Trust and the Global Diversified Infrastructure Fund run by Colonial First State (recently rebranded to First Sentier Investors).
Its assets under management now total more than A$135 million, with the new capital raise designed to provide additional investable capital for two of its fund investments.
“Investing in unlisted infrastructure can take time as there’s not always an immediate opportunity to deploy, and it can be dependent on the manager buying an asset or there being a redemption in the underlying fund,” Connolly said.
“We have a target weight for each of the funds we invest in based on the modelling work we do in relation to the underlying assets. The money we’re raising is to move towards our target weight for each of these funds.”
IPIF was established in 2015 and currently invests through a single product, the IPIF Core Fund. The fund targets a split of 50 percent growth assets and 50 percent regulated assets, and its investors comprise smaller institutional players who cannot afford to access large infrastructure funds alone, as well as self-managed superannuation funds and high-net-worth individuals.
The firm has expanded its team in recent months, appointing van Rooyen as CIO and former Hastings senior associate Sean Kim as senior investment analyst.
Van Rooyen told Infrastructure Investor that he joined IPIF as he “really liked the business model” that Connolly had built to date.
“IPIF is providing access to a difficult asset class for a very large section of the market that can’t get access – that market being self-managed superfunds, high-net-worth individuals, foundations and charities, and even university endowments looking to preserve their corpus by allocating to a stable asset class. We see a very large market which is underserviced,” he said.
IPIF’s investors have all been Australian to date and both van Rooyen and Connolly anticipate the new capital raising will not change this.
“We’ve had such a strong level of interest domestically that [those investors are] really still our focus,” van Rooyen said.
“In the next 12 months we’ll focus on delivering on the mandate for IPIF Core, which is to achieve our diversification strategy and deliver on the returns benchmark for existing and new IPIF investors. We’ll focus on the underserviced Australian market at this point and as our product becomes more known we’ll take that to Asia if that’s where the demand is.”
On the prospect of adding a fifth fund to the IPIF portfolio, Connolly said it was “possible” and that the team were continually meeting new managers in the sector.