Exclusive: ICG aims for $575m in double fundraise

Having collected $108m for its two pooled vehicles, the Sydney-based firm is also targeting direct investors via separate accounts.

Australian fund manager Infrastructure Capital Group (ICG) is forging on with efforts to raise between A$600 million (€387 million; $426 million) and A$800 million from new and existing investors, according to a top executive at the firm. 

Peter Welch, global head of capital at ICG, told Infractructure Investor that the company has now secured A$150 million from institutional clients. 

The fresh capital will be used to make additional investments from two funds worth approximately A$1.5 billion in total – the A$422 million Diversified Infrastructure Trust Fund (DIT) and the A$1.08 billion Energy Infrastructure Trust Fund (EIT).

“We focus predominately on mid-market, core and core-plus brownfield assets but we are also willing to explore greenfield investment opportunities,” explained Welch. 

The DIT portfolio comprises a mix of GDP and CPI-linked assets across the airport, seaport and social infrastructure sectors, while EIT consists mostly of CPI-linked, fully contracted investments ranging across gas pipelines, renewable projects, gas-fired power plants and assets which facilitate the export of energy. 

The firm posted net risk-adjusted returns of 11.3 percent for DIT and 8.9 percent for EIT in the year to 30 June 2015. 

Both funds have recently been fully committed, which is why ICG is seeking to raise up to A$800m to capitalise on a robust investment pipeline, according to Welsh, driven by government privatisations and organic growth within the portfolios. Last August, the firm acquired Port Hedland International Airport jointly with fellow Australian fund manager AMP Capital.   

“We have recently converted our two funds into closed-end hybrid funds from open-ended,” added Welch. “Investors can choose to redeem after an initial 10-year term, being 2024 (DIT) or 2025 (EIT), or roll for additional five-year increments if they wish.” 

He said that converting the funds was a necessary step to provide investors with greater liquidity and flexibility. “ICG appreciates the needs of investors. In addition to the conversion of the two funds to closed-end and maintaining a solid return profile, we are also engaging with investors that have a preference for larger investments and direct investors by offering separately managed accounts.”

Founded in 2000, ICG is wholly-owned by its staff. It has closed 24 investments across power, transport, commodity and social infrastructure to date.