Exclusive: First State raises $250m for global infra fund

Nine new investors have committed to the Australian firm's open-ended vehicle, helping it advance towards its $3bn hard-cap.

Colonial First State Global Asset Management (First State) has corralled nine new investors into its Global Diversified Infrastructure Fund (GDIF) and raised fresh capital totalling $250 million for the vehicle, according to a top executive at the firm. 

Danny Latham, a partner at First State, told Infrastructure Investor that the open-ended fund’s committed asset portfolio now exceeds $1 billion and is expected to grow to $1.5 billion over the next 12-18 months. The hard-cap for the fund is set at $3 billion. 

Eight out of the nine new investors came from Canada, the remaining one being a Middle Eastern family office. The fund’s three foundation investors at its inception in 2007 included two Australian super funds and an insurance company. 

“There is strong momentum with further closes expected in the next six months with investor appetite from Canada, Australia and Japan. Investors are attracted to the existing portfolio and the speed of deployment, with the new investors having their capital put to work within three to four months of commitment,” Latham said.   

The fund’s investment remit covers low-risk utilities and transportation assets with long-term predictable income and potential for capital appreciation.

Last month, the Australian asset manager acquired New Zealand’s largest gas pipeline from Shell-controlled Maui Development, through GDIF and the Colonial First State Active Infrastructure Income Fund, for NZD335 million (€201 million; $218 million). The Maui pipeline transfers about 78 percent of the country’s gas production.

The deal follows the NZD952.2 million acquisition of Vector Gas, a gas pipeline network in New Zealand last November. Vector Gas is also the technical and system operator of the Maui natural gas pipeline. 

“We are seeing strong global institutional interest in gas utility networks of this quality and it is pleasing to have a further acquisition in this sector so soon after agreeing to acquire Vector Gas,” added Latham. 

The two proposed acquisitions, still subject to regulatory approval, are expected to close in the first half of 2016.
GDIF’s six existing investments comprise Brisbane Airport, Adelaide Airport and ANZ Terminals in Australasia as well as Anglian Water, Electricity North West and Caruna in Europe.

The portfolio generated a 13.9% gross IRR between 2007 and 2015, according to a document seen by Infrastructure Investor.