Montreal-based Fiera Capital has teamed up with Aquila Infrastructure Management to create Fiera Infrastructure, which starts off with C$500 million ($383.60 million; €341.65 million) of invested and committed capital.
Alina Osorio, chief executive of Toronto-based Aquila, which is not affiliated with Germany's Aquila Capital, will serve as president of the new joint venture.
“This is our proprietary platform that we’ve created,” John Valentini, Fiera’s chief financial officer, told Infrastructure Investor during a phone interview. “Basically, we’ve done a sort of acquisition of Aquila Infrastructure and the management team of Aquila will be the management team of Fiera Infrastructure going forward.”
Fiera Infrastructure will target the whole range of infrastructure sub-sectors across OECD countries, Valentini said. The new firm, based in Toronto, will initially be staffed with six individuals. Aiming to expand both the team and its footprint across North America in first instance, it will also look to settle in the UK in the medium to long-term.
“Our intention is really to build a global platform,” Valentini said. Aquila’s international portfolio includes hydroelectric projects, regulated utilities, wind and solar projects, and transportation assets.
The creation of the new entity, in which Fiera Capital owns 75 percent, comes a little over two months since the Montréal firm announced its divestment from Axium Infrastructure, its previous infrastructure platform.
“We divested our 33 percent stake in mid-January,” Valentini confirmed. Previously known as Fiera Axium, the infrastructure investment firm changed its name last September to Axium Infrastructure to comply with the Volcker Rule, which prohibits ‘covered’ funds from having the same name as a parent banking entity, affiliate or subsidiary. As a shareholder participating in the control of Axium, Fiera Capital – which is under the control of the National Bank of Canada – was subject to the rules.
As for the size of each investment, Valentini said it would likely range between C$50 million and C$100 million, depending on whether the capital is deployed in a single asset or a portfolio of projects. However, “given the size of the fund now, a maximum size could be as high as 25 percent because the intention is that the fund will continue to grow,” he added.
This transaction will bring Fiera Capital’s current infrastructure asset portfolio to C$1.2 billion, which includes Fiera Infrastructure’s C$500 million of invested and committed capital and C$700 million of infrastructure debt. However, the firm’s infrastructure debt platform is managed by Fiera Infrastructure Debt, a separate and unrelated entity to Fiera Infrastructure, led by David Frei.
“This transaction is in line with Fiera Capital’s strategy of expanding its current service offering in alternative strategies and enhances our ability to offer our clients the best possible investment opportunities, in a wide array of asset classes,” Fiera Capital chairman and chief executive Jean-Guy Desjardins said in the statement.
The transaction is expected to close in the second quarter of 2016.