Fundraising

Infracapital greenfield arm adds broadband firm

Launched in April on behalf of Prudential, the London-based fund manager’s new greenfield business will add Gigaclear to its portfolio.

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UK insurer Prudential has agreed to invest up to £20 million (€28 million; $31 million) in Gigaclear, a firm bringing faster broadband connectivity to the UK’s rural areas. The firm’s existing shareholder, asset management firm Woodford Investment Management, is also committing £10 million.

Prudential’s investment will be managed by UK fund manager Infracapital, its infrastructure investment arm. It thereby forms part of the new greenfield strategy launched by Prudential and Infracapital last month and which is being headed by former 3i Infrastructure partner Andy Matthews.

“We felt that there continues to be a market opportunity to invest capital in greenfield and we therefore decided that we should beef up our activity there,” Infracapital director and co-founder Ed Clarke told Infrastructure Investor following the launch.

Investments are not being made through the firm’s existing funds, whose mandates are largely restricted to core operating assets. Infracapital’s latest vehicle, which reached a final close on £1 billion last October, is about a third deployed.

The greenfield unit is targeting investments in the energy sector with a lesser emphasis on transport, telecommunications and social infrastructure. The first asset to come under its supervision was Prudential’s £100 million equity stake in the £1 billion Swansea Bay Tidal Lagoon project.

Gigaclear aims to bring high quality, fast and reliable broadband connectivity to the UK’s rural population, offering customers speeds of up to 1 gigabyte per second (Gbps) via fibre optic cable in areas typically under-served by the existing large broadband providers.

The company has built and is operating 23 rural fibre networks and has a further 31 in construction. It is targeting a market of 1.5 million rural households and businesses.

“This is a unique opportunity to invest at an early stage in the development of high speed communications infrastructure for the UK’s underserved rural population,” said Clarke in a statement announcing the deal.