€1.5bn EU infra fund reaches first close

Three new sponsors have joined the European Union’s (EU) €1.5 billion Marguerite infrastructure fund allowing the vehicle to reach its first close with over €700 million in commitments, the European Investment Bank (EIB) said in a statement.

EIB headquarters in Luxembourg

Malta’s Bank of Valletta, Portugal’s Caixa Geral de Depósitos and the European Commission (EC) have joined the six original sponsors of the fund, with the EC contributing €80 million.

Marguerite launched late last year with €600 million of seed capital from cornerstone investors the EIB, France’s Caisse des Dépôts, Italy’s Cassa Depositi e Prestiti, Germany’s KfW, Spain’s Instituto de Crédito Oficial and Poland’s PKO Bank Polski – all state-backed banks, each having contributed €100 million to the fund. Its objective is to invest in transport and energy projects across the EU.

The EIB has also officially confirmed that Nicolas Merigo, the former head of Santander Infrastructure Capital, is now the chief executive of Marguerite Adviser, as previously reported by InfrastructureInvestor.com. The advisory company will be responsible for the day-to-day management of the fund, including originating, appraising, structuring and executing deals, as well as monitoring and asset management duties. It will be based in Paris.

Marguerite is positioning itself primarily as a greenfield fund, with at least 65 percent of the fund to be channelled to greenfield trans-European network projects (TEN). TEN projects aim to better connect the EU’s 27 member states and stimulate growth in the single market.
 
The fund said it will target the transport sector with 30 percent to 40 percent of its commitments, the energy sector with 25 percent to 35 percent of commitments, with 35 percent to 45 percent of the fund to be invested in renewable energy. No more than 20 percent of the fund should be invested in one single EU country.

In addition, the fund’s core sponsors will put in place a debt co-financing facility of up to €5 billion to provide long-term debt for projects Marguerite invests in.

The EIB said that fundraising is continuing and that the fund has received a positive response from investors, including private investors and major pension funds. Marguerite is targeting a final close of €1.5 billion by the end of 2011. It should make its first investments in mid-2010, as soon as the advisory team, currently still recruiting, is fully operational.

Marguerite will be administered by a management board including one representative from each of the six core sponsors, two representatives from the advisory team and three independent experts, yet to be appointed. There will also be a five-member investment committee, which will approve investments, comprised of representatives of the advisory team and independent representatives.