Canadian pension CDPQ and Australian fund manager AMP Capital are betting on growing demand for mobile services, providing $500 million in financing to Tillman Infrastructure, a cellular tower and telecoms infrastructure company headquartered in New York.
CDPQ will be providing $300 million of the total through its fixed-income division, while AMP Capital is funding its portion of the investment through AMP Capital Infrastructure Debt Fund III, which closed last August on its $2.5 billion hard-cap. In addition, the vehicle secured an extra $1.6 billion in co-investment capital through two separate $800 million co-investment pools: one from LPs in the fund and another from investors seeking access on a deal-by-deal basis.
The investment will help Tillman, which began construction of its first sites late last year, finance the construction of approximately 1,500 new telecoms towers across the US.
“Under this agreement, the investment could eventually reach up to $1 billion based on future growth needs,” the parties said in a joint statement.
Asked how and when an increase in investment would be decided, CDPQ and AMP Capital declined to comment. But one source told Infrastructure Investor that a mechanism for the incremental increase is included in the agreement. “This is a mutual option for the company and the lenders that both will analyse when the initial commitment has been deployed,” the source said.
“The transaction marks the second investment in telecommunications infrastructure in the region since the close of AMP Capital’s Infrastructure Debt Fund III last year,” the fund manager’s infrastructure debt partner Patrick Trears said in the statement.
Last October, AMP Capital provided $200 million in mezzanine debt to Vertical Bridge, the US’s largest private owner of telecoms tower infrastructure. More recently, in March, it invested $200 million in equity, to fully purchase its first fibre-optic internet developer, Everstream Solutions.
In addition to targeting the telecoms sector – both through its debt and equity funds – AMP Capital has been bolstering its US market position, promoting two senior members of its infrastructure debt team. In March, Spencer Ivey became principal of AMP’s infrastructure debt group in North America, while Evan Nahnsen was promoted to director.