Investcorp eyes ‘significant opportunity’ with new North America infra platform

Michael Ryder joined from OMERS to lead the expansion, which he tells us will target the region’s ‘underserved mid-market’.

Bahrain-based asset manager Investcorp has announced its latest expansion, with the launch of the company’s first dedicated infrastructure investing platform in North America. The launch comes three years after the firm established its first infrastructure business in its native Gulf, through the creation of a joint venture with what was then known as Aberdeen Standard.

Infrastructure Investor understands that the decision to expand the firm’s infrastructure business from the GCC to North America was primarily because the firm saw an opportunity to capitalise on what it sees as an underserved mid-market. Additionally, the firm believes it will complement its existing businesses in North American private equity and real estate investing, taking on a broader mandate than those existing verticals.

An additional pull is the political and social climate of the region, according to Michael Ryder, who joined Investcorp as a senior adviser on infrastructure in February, following four years as a senior managing director for infrastructure at the Ontario Municipal Employees Retirement System.

“[North America] has significant need for infrastructure investment. We’ve seen the bipartisan support through the Infrastructure Investment and Jobs Act in November last year,” he told Infrastructure Investor. 

Ryder pointed out that public opinion became overwhelmingly pro-infrastructure spending after a report last year from the American Society of Civil Engineers said that the US would need $2.4 trillion spent on infrastructure over the next 10 years. 

He continued: “So, this is not an investment need that will be solely served by the public purse. And there’s significant opportunity for private investors such as ourselves to make investments in the space to promote the maintenance and the renewal of existing infrastructure, as well as to build out new infrastructure.”

Ryder stated that the platform will invest across infrastructure sectors. “We will invest in the energy value chain, including energy transition and decarbonisation. We’ll look at digitisation and communications, particularly thinking about how we can help support and promote universal access over time, mobility, transportation, and industrial and social services.”

In terms of the platform’s first fundraise, Infrastructure Investor understands that there is no set timeframe for this. For its GCC-focused fund, the anchor investor was PIF, Saudi Arabia’s sovereign wealth fund. PIF said it would provide up to 20 percent of the final fund size, which was targeting between $800 million and $1 billion.

Currently, Investcorp’s North American business is not expected to be a joint venture like its previous effort. Nevertheless, Ryder stated: “Our approach to growing this business is still being worked through, and we’re considering multiple alternatives to grow and rapidly scale it. Today, we may partner with an existing team in an existing platform, either on specific investments or perhaps even more holistically. We’re still considering those options relative to growing a business organically ourselves.”