AXA Investment Managers – AXA Group’s asset management company – is positioning itself as a force to be reckoned with in the infrastructure debt space, with a commitment to invest up to €10 billion in the sector over the next five years, the company said in a statement.
Charles Dupont – formerly a partner at French fund manager Antin Infrastructure Partners – will lead the new infrastructure debt platform and has been tasked with building out a dedicated team. The latter will be part of AXA Real Estate, which already manages a €7 billion commercial real estate debt platform.
Dupont – a 15-year infrastructure veteran – will report to Isabelle Scemama, AXA Real Estate’s head of real estate asset finance. After leaving Antin at the end of last year, Dupont held a brief stint as vice president for infrastructure asset management at the Paris office of the Caisse de dépôt et placement du Québec, a Canadian pension. He was at the Caisse from January to March.
The €10 billion commitment will come from AXA’s various insurance units, with AXA Real Estate able to underwrite loans of up to €500 million on behalf of the group. The loans will target core infrastructure assets primarily in core European economies, AXA said, adding it is already eyeing a pipeline of “strong investments”.
“The group has appointed AXA RE to manage the [€10 billion] allocation with the objective of leveraging the expertise of our existing real estate debt platform,” Scemama told Infrastructure Investor.
“Each AXA subsidiary will have access to the loans, through a sort of internal syndication process, which is how we’ve been doing it for real estate debt,” Scemama explained. For the moment, only the AXA group will have access to the platform, but Scemama said it could be opened to third-party clients at some point in the future.
Scemama’s team has already done some infrastructure debt investments in the past, across core infrastructure and other more hybrid assets, like car parks. But while she says there are “clear similarities” between the two types of debt, she was also quick to point out that the “infrastructure universe is large and diversified and that’s why we are happy to have Charles Dupont on board”.
AXA is not alone in seeing synergies between infrastructure and real estate debt. French bank La Banque Postale Asset Management is currently raising a hybrid infrastructure and real estate senior debt fund.
Rene Kassis, who leads the debt platform, previously told Infrastructure Investor that “the common theme here is real assets; that the underlying assets are either physical assets, like buildings, or essential infrastructure services”.
Scemama points out that AXA’s wholehearted embrace of infrastructure debt is part of a wider drive by European insurance companies into illiquid assets. “If you look at US insurance companies, they already allocate more to non-liquid assets. In Europe, we are now beginning to move in that direction,” she argued.