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Exclusive: IFC infra fund nearly half deployed

The chief executive of the institution’s asset management arm updated us on the $1.2bn vehicle’s portfolio, its investor base and potential moves beyond infrastructure equity.

The IFC Asset Management Company, an International Finance Corporation subsidiary that manages third-party capital, has nearly deployed half of its infrastructure fund, according to its chief executive.

In an interview with Infrastructure Investor, Gavin Wilson said the vehicle has made 10 investments so far, comprising five assets in Latin America, one in Africa, one in Turkey, two in India and one in China. The portfolio spans a wide range of sectors, including renewables, telecoms, ports, pipelines and water distribution.

The vehicle reached its final close in October 2013, beating its initial $1 billion target and garnering commitments from 11 investors. Its LP base comprises a mixture of global pension and sovereign wealth funds, with ticket sizes averaging $100 million, Wilson said.

The IFC Global Infrastructure Fund tends to target high-teen returns. The IFC has so far always co-invested alongside the vehicle, typically – but not always – on a 50/50 basis. Wilson said the IFC AMC was not in the market for a successor offering, adding that the company might look to target infrastructure mezzanine or debt in the future, but that it was not currently marketing related products.

Wilson was optimistic about emerging markets’ prospects, saying that PPPs and privatisations were starting to be embraced by countries in every region of the globe. He was also enthusiastic about the other side of the equation, with investor appetite rising for infrastructure projects in developing nations.

“The long-term trend is that institutional investors are gradually getting more exposed to emerging markets. And this is not only valid for infrastructure and private equity, it is true across the board.”

When asked about the need for guarantees in what remain riskier investment destinations, he observed that help from the World Bank’s Multilateral Investment Guarantee Agency sometimes proved crucial, though primarily to get other investors on board.

“It tends to be driven by other private investors than us. Because of the nature of our business we understand the market very well,” Gavin said. “The decision as to take political risk insurance or not lies with other investors involved in the project. And in some situations, it is extremely important.”

Learn more about infrastructure investing in emerging markets at our EM Forum next week in Berlin