Citi partners to invest in airports

Citigroup’s debut infrastructure fund, targeting $5bn, has made its second investment in airport development company Vancouver Airport Services. It is acquiring 50 percent of a subsidiary of Vancouver Airport Authority.

Citi Infrastructure Investors has partnered with the non-profit operator of Vancouver International Airport, the Vancouver Airport Authority, to pursue airport investments.

In order to form the partnership, Citi’s infrastructure investment platform will acquire 50 percent of global airport investment, management and development company Vancouver Airport Services, a subsidiary of Vancouver Airport Authority. Vancouver Airport Services will become CII’s exclusive platform for investing in airline assets. Financial details were not disclosed.

Vancouver Airport Services’ network includes 18 airports in seven countries. Citi Infrastructure Investors, or CII, will enhance the management of the company by virtue of its global connections, long-term capital and in-depth understanding of airline investment.

“We see the partnership with CII as critical in taking [Vancouver Airport Services] to the next stage of growth,” said Vancouver Airport Authority president and chief executive Larry Berg in a statement. “We believe we have found a strong, complementary partner that understands airport infrastructure and brings a lot to the table.”

The investment will be the second made out of CII’s debut infrastructure fund which began fundraising last year with a target of $3 billion (€1.9 billion), a source close to the firm told PEO. The fund’s target has since been raised to $5 billion.

CII’s first investment was made in November 2007. The infrastructure group was part of a consortium including Singaporean sovereign fund GIC Special Investments, Prudential M&G’s infrastructure arm Infracapital Partners and HSBC Bank that acquired UK water and waste water services company Kelda for £3 billion.

Citigroup’s alternative asset management arm launched CII in May 2007 to act as a platform for the group to invest in large institutional infrastructure projects around the world. The unit focusses on making long term investments in core infrastructure assets, including water, waste, roads, airports, ports, rail and electricity, and oil and gas networks, largely in OECD countries. The team is co-headed by Juan Bejar in London and Felicity Gates in New York.