Bilfinger Berger fund buys two assets for £31m

The fund, which recently raised £212m on the London Stock Exchange, has bought a 50% stake in two Canadian transportation projects from developer parent Bilfinger Berger. It plans to complete the acquisition of a portfolio of 19 assets by the end of the first quarter.

Bilfinger Berger Global Infrastructure (BBGI), the debut listed infrastructure fund of German group Bilfinger Berger, has announced the acquisition of two transport projects from its developer parent.

BBGI paid close to £31 million (€37 million; $49 million) for a 50 percent stake in Canada’s Golden Ears Bridge – a 1-kilometre, six-lane bridge connecting Maple Ridge and Pitt Meadows to Langley and Surrey, in British Columbia – and an equal-sized holding in the Kicking Horse Pass – a link extending through the Rocky Mountains between British Columbia and Alberta.

The infrastructure fund, which raised £212 million on the London Stock Exchange last December, said it plans to complete acquisition of the remaining assets of a 19-project portfolio by the end of the first quarter of the year. 

The portfolio – to be acquired solely from Bilfinger Berger and comprised mostly of operational or near-operational public-private partnership (PPP) projects – will span roads, education, healthcare, justice and other sectors. The majority of it will be located in the UK (41.4 percent), followed by Canada (26.9 percent), Australia (26.9 percent) and Germany (4.8 percent).

In addition, BBGI will be keeping its eye on a potential £270 million-plus collection of assets that it has preferential rights to acquire from Bilfinger Berger Project Investments. The latter owns 31 PPPs across the world.

BBGI will target an initial 5.5 percent annualised dividend yield and a rate of return of between 7 percent and 8 percent over the long term. It will be managed internally by transferred staff from Bilfinger Berger with experience in PPP management. 

As a result, “BBGI is expected to realise cost benefits from internal management structure, in particular given that there are no NAV [net asset value] based management fees, acquisition fees or performance fees charged,” Bilfinger Berger explained in a previous statement. “The annualised total expense ratio is therefore expected to decline as the portfolio grows,” the firm added.