Gravis Capital Partners (GCP) is planning to list a new vehicle on the London Stock Exchange that aims to raise £50 million (€61 million; $73 million) to provide subordinated debt for projects that form part of the UK’s private finance initiative (PFI).
The new vehicle – GCP Infrastructure Investments – is targeting a dividend yield of eight percent per year and is the UK’s first listed fund focusing on subordinated debt, GCP said in a statement. It will serve as a feeder fund investing all of its net proceeds from the listing in the company’s GCP Infrastructure Fund. Oriel Securities is the sponsor and sole bookrunner on the offering.
GCP Infrastructure Fund, which was launched about this time last year, has already invested in £24 million worth of PFI debt, GCP said. This amount is expected to rise to £30 million by the time of the new vehicle’s listing. Once GCP Infrastructure Investments channels its proceeds from the public listing it will become the major shareholder in the GCP Infrastructure Fund.
GCP says that the “disruption in the financial markets since mid-2007 has significantly reduced the availability of debt financing for PFI-related infrastructure project companies in the UK”, an opportunity its new vehicle seeks to take advantage of in what looks to be a growing market.
Hadrian’s Wall Capital, together with Aviva Investors, is raising a subordinated debt fund aiming to raise £500 million and €500 million to lend to public-private partnership (PPP) projects across the UK and continental Europe. AMP Capital is targeting a junior debt fund worth €1 billion to invest in PPPs across the world. And DUET, a London-based firm, is raising a senior debt fund targeting PFI projects.