Fiera Infrastructure taps PPP pipeline with new partnership

The firm aims to grow its C$1.6bn portfolio by agreeing to own and finance projects built by Canadian construction company EllisDon Capital.

Fiera Infrastructure is investing in a portfolio of public-private partnerships that Canadian construction services company EllisDon Capital is developing as part of a new partnership agreement.

Alina Osorio, the infrastructure investment firm’s president, said Fiera will purchase large equity stakes in 10 social, healthcare and transportation projects across Canada that EllisDon is currently constructing. The firm plans to close on three deals this quarter, which include investments in a hospital, civic center and school, she said.

In addition to acquiring an interest in EllisDon’s existing portfolio, the two sides also agreed Fiera will have a right of first offer “for a pre-agreed period” for future projects, including two hospital facilities awarded through a bid process in 2018. The firm did not specify the length of the pre-agreed period.

“This isn’t an acquisition of one project,” Osorio told Infrastructure Investor. “It allows us to invest in a portfolio across a number of projects and over time.”

She declined to disclose how much Fiera is investing in the portfolio but said the projects meet a key part of the firm’s strategy to invest in mid-market infrastructure. The firm is investing through its open-ended EagleCrest Infrastructure fund.

Fiera typically invests in deals requiring less than C$200 million ($152.2 million; €132.4 million) of equity and in sectors ranging from renewable energy projects to detention centres, as well as the Thames Water utility.

“Infrastructure tends to be a capital-intensive industry. For these projects to be built, you need access to significant amounts of capital,” Osorio explained. “The partnership provides EllisDon the ability to monetise the value they created in development and construction by partnering in the operational phase.”

Osorio said the partnership, which will focus mostly on Canadian projects but also on some US opportunities, will allow Fiera to grow its C$1.6 billion portfolio of assets and commitments by providing the firm steady access to projects. The Canadian PPP market is competitive, she said, and a working relationship with a developer can be a “win-win for both of us.”

AVAIO Capital announced a similar partnership last week as it officially spun out from engineering giant AECOM. AVAIO said the firm will maintain a deal-sourcing agreement with AECOM.