DG Infra Yield locks down French prison deal

The Belgian fund’s maiden French investment sees it acquire an 80% stake in a special purpose vehicle that holds four prisons. Eiffage was the seller and will retain a 20% stake in the €270m prison projects.

Benelux-focused unlisted infrastructure fund DG Infra Yield has done its first deal in France, acquiring a majority stake in four prison projects from French developer Eiffage.

The deal – the consideration for which was undisclosed – will see DG Infra Yield acquire 80.1 percent of a special purpose vehicle holding prison facilities located in Roanne, Lyon, Nancy and Beziers. Eiffage will retain the remaining 19.9 percent of the holding company and will continue to be responsible for the prisons’ maintenance and management.

The four prison deals are worth about €270 million in total and are backed by 30-year public-private partnership (PPP) contracts. 

DG Infra Yield, an initiative of Belgian private equity firm Gimv and Dexia Bank Belgium, reached a first close a few months ago on €116 million and is planning a second close before the year is out. The fund is targeting a final close of between €150 million and €200 million and still has almost a year to fundraise. Its debut French deal means the fund is now over 40 percent invested.

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 limited partners, mostly from Belgium, include financial firm Arcofin, insurer Ethias, bank VDK Spaarbank, Flemish state-backed fund Vlaams Toekomstfonds and Dutch construction pension Pensio-B. 

In addition to the French prisons acquisition, DG Infra Yield has recently partnered with Dutch developer Ballast Nedam to form a vehicle that will allow the fund to buy several operational assets from the developer. Prior to that, the fund invested in a subordinated loan facility for the refinancing of 12 operational onshore wind turbines, as well as a mezzanine investment in the offshore wind farm called Belwind, both in Belgium.