BBGI feels secondary squeeze, eyes more greenfield

The London-listed fund has also recorded a £13.4m increase in its NAV following foreign exchange movements amid sterling’s depreciation.

Bilfinger Berger Global Infrastructure is looking towards greenfield infrastructure projects for growth after noting decreasing value in the “very competitive” secondary market for transport and social infrastructure projects.

The London-listed vehicle of German developer Bilfinger Berger, which typically invests in brownfield assets, noted in its quarterly management statement that over the last four months it evaluated several opportunities in the secondary market but failed to find sufficient value to justify investments.

In contrast, BBGI said it continues “to identify and assess additional attractive opportunities” in the greenfield market. The vehicle has been shortlisted for a flood diversion PPP in North Dakota, is in the process of submitting documents to be pre-qualified for the Silvertown Tunnel PPP project in the UK and is also eyeing road projects in Norway.

“BBGI will continue to follow a path of disciplined growth, being selective and surgical in its approach to identifying opportunities and buying secondary assets on an opportunistic basis,” it stated.

While in August the company maintained it was “cautiously optimistic” regarding secondary market activity, it failed to provide such assurances in the statement published today.

Meanwhile, BBGI added that it has recorded a £13.4 million ($16.6 million; €15.5 million) increase in its NAV following currency fluctuations amid sterling’s depreciation since the UK’s EU referendum. While BBGI said it will only report its NAV next month, the figure stood at £521.78 million as of 30 June 2016.

“Given its larger weighting to international projects, BBGI has seen the most significant positive impact on NAV from the depreciation in sterling amongst the PPP peer group, adding £51.1m in the year to date,” broker Numis Securities said.

“Whilst FX movements will continue to impact NAV valuations, we note that the manager seeks to hedge the impact of FX on its cashflows to provide some certainty over Sterling distributions. It remains the highest-rated PPP fund in the sector on an NAV basis.”