Barclays Integrated Infrastructure Fund in £560m deal

The fund has bought out all non-Barclays investors in another Barclays Private Equity-managed fund, Infrastructure Investors. The transaction is meant to give the newly raised fund ‘critical mass from the outset’.

Barclays Integrated Infrastructure Fund (BIIF) has bought out all non-Barclays investors in its sister fund, Infrastructure Investors (II), for £558.6 million (€620 million; $845 million).

The transaction was funded in part by a £346 million acquisition debt facility provided by a banking group comprised of Calyon, Lloyds TSB, Nationwide and RBS.

Both funds are managed by Barclays Private Equity, which created II in 2003 as part of a partnership with Societe Generale Corporate & Investment Banking.  Private equity firm 3i Group invested £150 million in II in June 2005 and Fleming Family & Partners became an LP in II in March 2006. BIIF, which previously had an undisclosed interest in II, will now be its sole owner.

II owns a portfolio of 84 investments in operational private finance initiative- and public-private partnership-type projects in the UK and the Eurozone, including healthcare facilities, schools, roads, defence facilities, government offices and Scottish waste treatment plants. To date, it has realised 5 percent of its investments, according to the Barclays Private Equity website.

Chris Elliott, managing director of Barclays Private Equity’s infrastructure team, said in the statement that the acquisition of II “provides critical mass from the outset” for BIIF, which is the newest infrastructure fund to be raised by Barclays Private Equity.

BIIF will initially invest in operational infrastructure projects in the UK and elsewhere in Europe but will eventually broaden its investment focus to include primary projects.

Besides BIIF, the Barclays Private Equity manages four other infrastructure funds – the Alma Mater Fund, Barclays UK Infrastructure Fund and Barclays European Infrastructure Funds I and II. The combined assets under management of all its infrastructure funds is more than £1 billion.