INPP eyes Australian deals

The London-listed fund, which just closed a £123m school PPP alongside Aviva and the EIB, is also positioning itself to tap “significant” opportunities in the US market.

International Public Partnerships (INPP), an infrastructure fund managed by London-based Amber Infrastructure Group (Amber), is looking to explore new shores in a bid to diversify away from “mature” OECD markets.

In an interview with Infrastructure Investor, Amber chief executive Giles Frost explained that currency movements over the past few months had made the Australian market much more appealing. “A year ago one pound would give you one Australian dollar. Today it is worth two of them. That obviously makes Australian assets a lot more attractive.”

He said the company was now bidding for projects in sectors including social housing, higher education, hospitals and schools.

His statement closely follows the sale by Amber of 50 percent of itself to the Hunt Group of Companies, a US real assets firm with a “very similar business” to the UK manager, according to Frost. The move is intended to give INPP access to deal opportunities in the US.

“The Hunt Companies have very strong government relationships, but they are probably weaker in terms of [public-private partnership] expertise. So together we can forge a solid relationship.”

Getting better plugged into the US, he explained, was a way for Amber to pursue long-term growth in one of the world’s largest infrastructure markets. “Significant plans for infrastructure are going to be privately financed. So it’s a matter for us to think how we want to position the business in three to five years.”

This shift in strategy is being articulated despite sustained activity for INPP in its core markets. The company today announced that it had reached financial close on the third privately financed batch of schools being delivered through the UK’s Priority Schools Building Programme (PSBP).

The project involves total capital expenditure of £123 million (€167 million; $182 million). It will receive £8.4 million from INPP, with the residual amount provided by the European Investment Bank and Aviva Investors. The funding round will support the construction and operation of 12 new schools in the northwest of England during a 25 year period.

The PSBP aims to allow for the rebuilding of 260 new schools across the country. Five batches, representing 46 schools and a total capital spend of about £700 million, are being delivered via private funding through the PF2 structure. INPP expects to be investing up to £70 million overall in the programme, Frost said.

The news comes simultaneously to this morning’s release of INPP’s full-year result for the 2014 fiscal year, which saw the company’s net asset value grow 3.3 percent, dividend go up to 6.30p per share and profit before tax increase to £71.2 million.