INPP in oversubscribed £125m fundraise

The London-listed fund, which was originally targeting £75m, predicted a Brexit uplift as imminent central bank action is expected to make infrastructure more attractive.

Infrastructure fund International Public Partnerships (INPP), advised by Amber Infrastructure Group, has closed a £125 million ($165 million; €149 million) oversubscribed fundraise on the London Stock Exchange.

INPP was originally targeting £75 million, but ended up placing close to 84 million shares at 149.5 pence each, a 1.97 percent discount to the fund’s closing price prior to the 5 July fundraising announcement. It attracted both old and new investors.

Chairman Rupert Dorey said the oversubscription was “another sign of confidence in the company’s pipeline”. INPP has about £35.2 million of investment commitments crystallising in 2016, with a further £103.5 million coming through before March 2018. Amber Infrastructure is also working on a number of opportunities “at an earlier stage” in which INPP may participate.

Part of the proceeds had been earmarked to reduce INPP’s obligations under its revolving credit facility, after the company deployed more money into the Thames Tideway project and closed the acquisition of 10 Building Schools for the Future investments. The latter deal saw INPP pay £72.6 million to UK developer Balfour Beatty.

INPP’s latest fundraise also seems to have benefitted from Brexit. At the time of the original fundraising announcement, INPP stated that persistently low interest rates, as the UK’s central bank does “whatever it takes” to prop the country’s financial system, will depress government bond yields, making infrastructure assets comparatively more attractive.

The fund is also benefitting from the collapse of the pound, with its non-UK assets experiencing a valuation uplift. INPP said it “continues to hedge its short-term revenues from its non-UK assets to reduce the risk of volatility in its projected sterling denominated cashflows”.