Golding reaches €215m first close on second co-investment fund – exclusive

Munich-based Golding Capital Partners has reached a €215 million first close on its second infrastructure co-investment fund.

The capital raised to date for Golding Infrastructure Co-Investment 2020 brings it to nearly half of the €450 million target set by Golding. The fund – which targets a 9-10 percent net internal rate of return and will invest in ticket sizes of between €30 million and €40 million in Europe and North America – is expecting a final close in December.

Golding has made one investment so far from the fund, co-investing with EQT on its acquisition last year of German fibre broadband provider Deutsche Glasfaser from KKR, a deal initially agreed by EQT Infrastructure IV and which also received a follow-up co-investment from EQT Infrastructure V.

“What we’ve been pitching to our investors, more on the co-investment side, is that the key is really downside protection, analysis and sensitivities,” Bernd Schumacher, co-head of infrastructure at Golding, told Infrastructure Investor.

Schumacher added that Golding is keen to work with GPs it knows well and is therefore able to trust the due-diligence and asset-management processes. In return, he believes Golding’s fund can offer co-investment capabilities that few LPs are able to provide in the market.

“When it comes to co-investments, usually the processes are relatively short. Usually you only have three to four weeks,” Schumacher said. “We’re able to analyse the GPs’ due diligence and do our own during that timeframe, which turns out to really be a differentiator, because many LPs who are interested in co-investments just don’t have the setup to execute in a relatively short timeframe.”

The fund’s predecessor, Golding Infrastructure Co-Investment 2016, closed on €336 million in late 2018 and Schumacher said it has room to invest in one more asset. Schumacher expects more fibre deals to feature in the second fund, but does not expect many transport deals in the next 18-24 months.

“In Fund I, we don’t have a social infrastructure investment. Covid has proven in some countries the social infrastructure is slightly underinvested and we will see more money running into that sector,” he added. “We think you need to be very careful on the social infrastructure side. There are some regulatory regimes where it fits into infrastructure, but there are others where we would consider private equity being better owners. It depends on the asset and geography.”

Schumacher has worked in Golding’s infrastructure division since October 2016. He was joined as co-head of infrastructure at the beginning of this year by Thilo Tecklenburg, former chief operating officer and partner at Paris-based Meridiam.