FUND MANAGER OF THE YEAR, NORTH AMERICA
1. I Squared Capital
2. Stonepeak Infrastructure Partners
3. Macquarie Infrastructure and Real Assets
I Squared Capital celebrated the $7 billion final close of its second fundraise in September, more than doubling the commitments it received during its last effort.
However, its rise to the top is not due to fundraising alone; it’s also about how the firm is already investing its capital. Around 24 percent of the fund had been deployed at final close into assets including US midstream company Pinnacle, which operates oil and natural gas gathering and processing assets in the Deleware portion of the Permian Basin in west Texas.
The firm will look to stick closely to that strategy for investments to come. I Squared invests in mid-market operating assets in the energy, transportation, utilities and telecom sectors. Most investments will be in OECD markets, though a third can be invested elsewhere.
EQUITY FUNDRAISING OF THE YEAR, NORTH AMERICA
1. Stonepeak Infrastructure Partners
Stonepeak Infrastructure Partners was voted North America’s top fundraiser of the year. The firm closed Stonepeak Infrastructure Fund III on $7.2 billion last July after bumping up its hard-cap by $200 million to cater for last-minute commitments. Overall, fundraising drew over 100 commitments from investors seeking exposure to a North America-focused infrastructure strategy.
Stonepeak hopes to deliver a strategy targeting investments in power, water, energy, communications and transportation.
Documents published by Stonepeak investors show the firm’s fundraise offered a 20 percent carry (15 percent for first-close investors), an 8 percent hurdle and a 12 percent net internal rate of return target, inclusive of a 4 percent cash yield. Fund III more than doubles Stonepeak’s second fundraise, which closed on $3.5 billion in January 2016. Like Fund II, the firm will use its newest vehicle to target deal opportunities between $100 million and $1 billion.
So far, investments from Fund III include $500 million in a US-based transportation company and the creation of a midstream joint venture with Targa Resources Corporation.
DEAL OF THE YEAR, NORTH AMERICA
1. Calpine Corporation (Energy Capital Partners)
2. Enbridge (CPPIB)
3. Autoroute 25 (Transurban)
North America’s deal of the year is a $5.6 billion shake-up in the market’s natural gas industry. Energy Capital Partners acquired US-listed Calpine Corporation for what came out to be a deal worth $15.25 per share. It led a group of investors including Canada Pension Plan Investment Board to buy out the Houston-based company.
Calpine is one of the largest natural gas power generators in the US. The company has 80 power plants in operation or under construction and a 26GW generation capacity. Its portfolio also includes electricity distribution company Noble Americas Energy Solutions, which it purchased for $900 million in 2016.
The deal is symbolic of the transition the US natural gas market is experiencing. Expanding production, declining prices and the proliferation of renewable energy have led a wave of natural gas generators to seek consolidation or backing from investors.
Energy Capital held financial close on the Calpine deal in March 2018.
DEAL OF THE YEAR, LATIN AMERICA
1. InterGen (Actis)
2. Enel Renewables (CDPQ Infra, CKD Infraestructura México)
3. Spence Desalination Plant (Mitsui, ACS)
Actis has made investing in Latin America its speciality. The firm’s largest deal ever for InterGen’s Mexico power portfolio has made it as the region’s deal of the year for 2018.
The $1.26 billion deal landed Actis a 2.2GW portfolio of power assets, including six combined-cycle natural gas facilities and a stake in a 155MW wind project. The firm has signalled the portfolio, which it rebranded as Saavi Energia, cements its commitment to the Mexican power sector and will serve as the firm’s platform for the region.
InterGen was previously co-owned by Canadian retirement system Ontario Teachers’ Pension Plan and the China Huaneng Group.
Actis invested through its fourth energy fund, which closed in 2017 on $2.75 billion. The fund’s strategy is to acquire large stakes in electricity generation and distribution businesses in Latin America, Africa and Asia.
PPP DEAL OF THE YEAR, NORTH AMERICA
1. LAX Integrated Solutions (Fluor, Balfour Beatty, ACS, Bombardier)
2. Gordie Howe Bridge (Fluor, Aecon, ACS)
3. Purdue University Student Housing (Plenary Properties Purdue)
It seems fitting that readers voted North America’s largest public-private partnership to reach financial close in 2018 as the year’s best PPP deal.
LAX Integrated Solutions won the honour after raising $1.3 billion in private activity bonds to finance a $4.9 billion project at Los Angeles International Airport. It will build and maintain a rail system under a 30-year contract. Construction and engineering firms Fluor, Balfour Beatty, ACS and Bombardier linked up to secure the bid. Their proposal, which was approved by Los Angeles City Council, had the highest technical score and lowest cost proposal out of three teams competing in the bid process.
Now, they will build an elevated 2.25-mile track, six train stations and a moving walkway. The planned people mover is expected to have 10,000 passengers an hour and will support up to 87.7 million passengers a year.
PPP DEAL OF THE YEAR, LATIN AMERICA
1. Guayaquil port terminal (DP World)
2. Ruta del Cacao (Ferrovial, Ashmore Group, Mercantil Colpatria)
3. Autopista al Mar 2 (China Harbour Engineering Company)
Infrastructure development across Latin America is booming, and a lot of that is focused on transportation. No surprise, this year’s PPP deal of the year, Latin America falls in that category.
Global port operator DP World secured around $377 million of project financing to develop a deep-water multi-purpose port terminal in Ecuador that will be managed through a 50-year PPP agreement. Financing lined up includes backers like the Inter-American Investment Corporation, German finance institution DEG and French development agency PROPARCO. The overall investment is expected to be $1.2 billion.
DP World will construct, operate and maintain the port terminal, which will be capable of handling containers with an estimated volume of 800,000 TEUs (20-foot equivalent units). The project includes construction of a 20km access road to the port and the dredging of a new 16-metre deep access channel.
ENERGY INVESTOR OF THE YEAR, NORTH AMERICA
1. I Squared Capital
2. AMP Capital
3. Energy Capital Partners
I Squared Capital won the award for Energy Investor of the Year, North America, but this one is really about the partnership. The firm committed $500 million in cash to enter a venture alongside private equity firm Blackstone and energy company EagleClaw Midstream.
Now, EagleClaw will operate close to 1,000 miles of natural gas, crude and water gathering pipelines. It will be manage over 1.4 billion cubic feet a day of processing capacity and has nearly half a million acres in the southern Delaware Basin where it can build out midstream services.
In addition to its cash investment, I Squared committed its portfolio company Pinnacle Midstream to help develop the Permian Highway Pipeline Project. EagleClaw is a 50 percent partner on the $2 billion pipeline development.
Outside midstream, I Squared purchased a 3.4GW portfolio of Latin American and Caribbean assets, including hydroelectric, wind and thermal generation plants.
TRANSPORT INVESTOR OF THE YEAR, NORTH AMERICA
1. Ontario Teachers’ Pension Plan
2. VINCI (tie)
2. CDPQ Infra (tie)
Readers have awarded North America’s transport investor of the year to an organisation that pulled off a savvy sale, not a successfully completed mega-deal.
Ontario Teachers’ Pension Plan diversified its stake in Vancouver-based GCT Global Container Terminals, selling 37.5 percent to IFM Investors and 25 percent to British Columbia Investment Management Corporation. GCT is a leading container terminal operator in North America, managing assets in New York’s Staten Island, New Jersey, Vancouver and British Columbia.
The move is the second time in the past two years OTPP has divested a portion of an infrastructure asset in its portfolio – favouring forming partnerships with like-minded, long-term investors. In November 2017, the Canadian pension sold 30 percent of its stake in two UK airports – Bristol and Birmingham – to Australian investors New South Wales Treasury Corporation and Sunsuper Superannuation Fund.
TELECOMS AND BROADBAND INVESTOR, NORTH AMERICA
1. AMP Capital
2. Brookfield Asset Management
3. John Hancock Life Insurance Company
Australian fund manager AMP Capital won investor of the year for telecoms and broadband, possibly infrastructure’s fastest growing sector. For AMP, 2018 brought its two first telecoms deals.
The firm committed more than $200 million in equity to fully acquire Everstream Solutions, a regional service provider focusing on developing fibre networks in the US Midwest. AMP bought the company from M/C Partners, a telecoms and IT-focused private equity firm. Everstream has built and operated more than 10,000 route miles of fibre-optic cables throughout the Midwestern US, a network originally built and partially financed using government grants.
AMP also provided $200 million from its third infrastructure debt fund to New York-based cellular tower and telecoms infrastructure company Tillman Infrastructure. The commitment will allow Tillman to finance and construct approximately 1,500 new telecom towers.