Following in the footsteps of Dutch pension asset manager PGGM’s recent developer partnerships, Benelux-focused unlisted infrastructure fund DG Infra Yield has teamed up with Dutch developer Ballast Nedam to form the Benelux Secondary PPP Fund I (BSPPP I).
BSPPP I – 80 percent owned by DG Infra Yield, with the remaining 20 percent in the hands of Ballast Nedam – has been seeded with three Dutch operational public-private partnerships (PPPs), acquired from Ballast Nedam, worth around €700 million, both parties announced in a statement. Ballast Nedam said the equity stake sales will cause its consolidated assets to decline by approximately €180 million.
“We are very pleased with this first concrete step by DG Infra in the Dutch PPP market, and with the long-term commitment that Ballast Nedam, alongside DG Infra, has made to these projects. Following Belgium, we are now clearly positioning ourselves in the Netherlands as the financial partner of construction firms,” stated Chrisbert van Kooten, investment director at DG Infra.
Developer partnerships are becoming popular in the Benelux region for yield-savvy investors. The most famous examples have been the joint ventures formed between the €105 billion pension provider PGGM and developers Lend Lease (Australia) and BAM PPP (Netherlands). These joint ventures are one of the highlights of a recent interview with Henk Huizing, PGGM's head of infrastructure investments, published in the September issue of Infrastructure Investor magazine.
The PPPs represent DG Infra Yield’s second investment in the Netherlands, following the acquisition of a stake in Dutch parking operator Parkking last year. DG Infra Yield is a 30-year, unlisted infrastructure fund established last year by a Franco-Belgian consortium of banking group Dexia and investment firm GIMV.
The fund reached a first close a few months ago on €116 million and is targeting a final close of between €150 million and €200 million. To date, DG Infra Yield’s limited partners (LPs) have come from Benelux. As its name indicates, DG Infra Yield is focusing on annual cash distributions to investors, and is targeting life insurers and pension funds as its clients.
The fund’s LPs include financial firm Arcofin, insurer Ethias, bank VDK Spaarbank, Flemish state-backed fund Vlaams Toekomstfonds and Ductch construction pension Pensio-B. DG Infra Yield is planning a second closing later this year and still has a one-year fundraising period. It is already more than 30 percent invested.
In addition to the Dutch PPP acquisitions, DG Infra Yield also invested in a subordinated loan facility for the refinancing of 12 operational onshore wind turbines in Flanders, Belgium. The deal is similar to the fund’s first investment, where it provided a €10 million mezzanine debt tranche for an onshore wind project called Belwin, also in Belgium.