GIP raises A$2.75bn for first Aussie fund

The New-York based firm has also secured A$1bn for co-investments alongside the vehicle, which it launched last year after strengthening its team Down Under.

US fund manager Global Infrastructure Partners (GIP) has raised A$2.75 billion ($2.1 billion; €1.9 billion) for its first vehicle focused on the Australian market, according to sources with knowledge of the matter.

The firm launched the fund last year shortly after adding two heavyweights to its Sydney office in a bid to meet investor appetite for opportunities Down Under and position itself for a set of mega-deals slated for next few months.

Russell Smith, former head of Port of Brisbane, joined the firm along with Rob Stewart, ex-chief executive of Credit Suisse Australia and head of GIP’s Sydney office last June. Both are now spearheading the firm’s push in the Antipodes alongside Ari Droga, head of GIP in Australasia since 2008.

The vehicle will allow GIP to target Australian assets through a dedicated platform rather than through its Global Infrastructure funds suite. Sources close to the firm also confirmed that limited partners have pledged a total of $1 billion for co-investments alongside the fund.

The fundraising news was first reported by the Australian Financial Review. GIP declined to comment.

The $21.6 billion fund manager is not new to the Australian market, having acquired a 26.7 percent stake in Port of Brisbane through a consortium in November 2010. The firm sold its entire stake to Canadian pension La Caisse de dépôt et placement du Québec in November 2013, in a deal that valued the port at about A$6.2 billion.

GIP is part of a consortium that submitted a A$9.1 billion joint offer earlier this month alongside a Brookfield Infrastructure-led group for Asciano, one of the largest rail and port logistics companies in Australia. The two teams, which had previously been engaged in a bidding war, decided to unite after concerns were raised by the Australian Competition and Consumer Commission over a potential acquisition.

It is understood that GIP has also joined one of the consortia vying for Port of Melbourne. It may also be interested to bid for Port of Fremantle, should a process to sell the asset kick off. The firm is said no longer to be in the running to buy New South Wales power network Ausgrid.

Earlier this week, Infrastructure Investor reported that GIP received a $350 million pledge from the New York City Retirement System for its third global vehicle, which has a target of $12.5 billion.