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Existing LPs drive $3bn GIP continuation fund process

GIP is responsible for two of the largest-ever single-asset secondaries deals, having moved Gatwick Airport into a £3bn continuation fund in 2019.

Global Infrastructure Partners has carried out one of the largest-ever single-asset deals without bringing in outside investors.

The infrastructure giant moved TIL Group, a Switzerland-headquartered manager and developer of container ports, out of its 2011-vintage Fund II into a continuation vehicle worth around $3 billion, according to three sources familiar with the matter.

Existing limited partners were given the option to roll their existing stakes, sell or roll with a larger ticket size, affiliate title Secondaries Investor understands. Enough rolled to acquire the asset without the need for external capital.

The high capital expenditure requirements and growth potential of the business makes it a “great asset for permanent capital”, said one New York-based infrastructure investor. TIL Group is one of the 10 largest port operators in the world and there is room for consolidation among smaller players. For a Deep Dive into the ports sector, check out this month’s cover story.

A mix of institutional investors and secondaries funds rolled into the continuation fund, Secondaries Investor understands. Teacher Retirement System of Texas committed $100 million, according to data from affiliate title PEI.

Campbell Lutyens advised on the process.

The pricing of the deal was set by the sale of a minority stake. It is not clear who bought the stake or for what price.

GIP is now responsible for two of the largest-ever single-asset deals, according to Secondaries Investor‘s map of the largest continuation funds. In 2019, it carried out a £3 billion ($4 billion; €3.6 billion) process on Gatwick Airport. The price was set by the sale of a 50.01 percent stake to VINCI Airports, which valued the business at 20x EBITDA.

The firm manages $77 billion in assets across the energy, transportation, digital, water and waste sectors, according to its website.

Half of infrastructure secondaries investors expect to invest more than $500 million in the asset class during 2022, with 25 percent expecting to invest more than $1 billion, according to adviser Evercore.

GIP and Campbell Lutyens did not wish to comment.

This article first appeared in affiliate publication Secondaries Investor