GIP seeks more than $6bn for emerging markets

A week after Global Infrastructure Partners’ vice-chairman and partner Jim Yong Kim told Infrastructure Investor’s Hong Kong Summit that the infrastructure fund manager was going to focus on emerging markets at “full scale”, GIP is pitching a $5 billion vehicle that will target operating assets in middle-income countries in Latin America and Asia, a source has confirmed.

The emerging markets fund, a first for the New York-based firm, will seek investments in joint ventures and platform companies managing existing infrastructure in sectors including transport, energy, water and waste, and will target 20 percent gross returns, the source told Infrastructure Investor.

Kim, who resigned as president of the World Bank in January to join GIP, will manage the fund alongside Jin-Yong Cai, the former chief executive of the International Finance Corporation, who most recently served as a partner overseeing infrastructure investments in emerging markets for TPG Capital before joining GIP in May.

Details of the fund were first reported by Bloomberg.

GIP is also raising its third India-focused fund, after acquiring IDFC’s infrastructure vertical in July 2018. It is understood that Sharad Malhotra, a managing partner at the firm, will be managing the fundraise, which has a target size of $1.25 billion.

Fund IV closing soon

GIP is reportedly close to wrapping up a $22 billion fundraise for its fourth flagship vehicle.

Global Infrastructure Partners IV is charging LPs management fees on a sliding scale, ranging from 1.75 percent for commitments up to $75 million to 1 percent for amounts greater than $225 million, according to a GIP document seen by Infrastructure Investor.

The document shows other fund terms including 20 percent carried interest, an 8 percent preferred return, a five-year investment period and a 10-year total duration with two possible one-year extensions at the firm’s discretion. GIP is targeting gross returns between 15 and 20 percent.

GIP, which was launched in 2006 by Adebayo Ogunlesi, a former Credit Suisse Group AG executive is maintaining the same investment strategy for GIP IV as with predecessor vehicles. That is to seek majority or control positions in energy, transportation, water and waste management assets. Up to 15 percent of GIP IV can be invested in “select” non-OECD countries.

Brookfield Asset Management is also raising its fourth flagship fund, which is expected to close on around $20 billion, $2 billion more than its original hard-cap.

GIP declined to comment for this story.