BTG targets up to $2bn for LatAm infra strategy – exclusive

Brazilian investment bank BTG Pactual is looking to raise up to $2 billion for its latest infrastructure fund, Infrastructure Investor understands.

The firm is targeting between $1.5 billion and $2 billion for the new offering, which will seek to invest 75 percent of the proceeds across countries and sectors in Latin America. Some 25 percent of the capital is set to be reserved for opportunistic deals in Western Europe. A net return of 13 percent is envisaged for the vehicle.

BTG’s deployments in Latin America will target its native Brazil, as well as Chile, Argentina, Peru and Colombia. The 10-year fund will look to take controlling positions in its Latin American investments, while eyeing significant minority positions in any deals in Europe.

BTG declined to comment on the fundraising but Renato Mazzola, head of infrastructure at the firm, said there is significant capital available for private investors from local pension funds looking to diversify. In addition to Brazil’s ongoing privatisation agenda, Mazzola pointed to the country’s general election this year which could accelerate concessions and privatisations, a situation that is also expected to arise from Chile’s election last November, Colombia’s upcoming vote and Argentina’s election next year.

BTG was previously responsible for closing Latin America’s largest ever infrastructure fund in 2013, when it raised $1.8 billion for BTG Pactual Brazil Infrastructure Fund II. The fund’s assets include power generation group Latin American Power, transmission line Tropicalia and telecoms group globenet, the latter of which has already realised a 2.22 times multiple without divestment.

The fund was a successor to its maiden Brazilian strategy, which closed in 2005 and was the first fund in the country to focus on energy generation and transmission. Realised investments from the fund include a 158MW wind farm sold to CPFL Energia in 2012, netting it a 22.5 percent IRR.

The group also has two realised investments in Barcelona following opportunistic European investments. BTG sold its interest in water group ATLL to Acciona in 2015 and offloaded its 65 percent stake in two toll roads to Ardian in 2014, generating a 47.3 percent IRR.