A new fund led by Japan’s trading house Marubeni is expected to hold a first close on ¥30 billion ($275 million; €240 million) this month, a spokeswoman for the firm told Infrastructure Investor.
MM Capital Infrastructure Fund 1, which Marubeni launched last month in partnership with Mizuho Bank and Asset Management One, will invest in brownfield transportation and energy infrastructure assets, “particularly” in OECD countries, according to a joint statement.
“We are talking with several potential anchor investors,” Marubeni spokeswoman Matsushita Sachiko, said. “Besides, Marubeni and Mizuho [Bank] will also participate as limited partners,” she added, but declined to disclose the amount raised to date. The aim is to hold a final close of ¥50 billion in February 2020.
The vehicle will have a life span of 14 years, including a four-year investment period, and will seek to raise capital from both domestic and foreign pension funds and financial institutions, Sachiko said. The minimum ticket size for each deal will be ¥500 million and returns are expected to be in the high single digits, she added.
The fund will acquire operational assets Marubeni has developed around the globe.
“For Marubeni, asset recycling is one of the motivations to create the fund business. Selling down greenfield projects developed by Marubeni – and [its] partners – to the fund after completion will be an origination source,” Sachiko explained.
Asked whether this would cause any possible conflicts of interest, Sachiko said the managers will be “secondees” from Marubeni, they will be “independent” from the firm and “purely dedicate themselves to the fund”.
“We are planning to sell down three existing assets to the fund as seed asset[s] and, through the investment decision process, the fund has established a mechanism to require major LPs’ approval in order to avoid conflicts [of] interest when [it] purchases assets from Marubeni,” Sachiko explained.
Marubeni announced last month that it had partnered with Mizuho Bank and Asset Management One to launch MM Capital Partners, the fund’s manager. Marubeni holds a 90 percent stake in the joint venture, while the remaining 10 percent is equally split between Mizuho Bank and Asset Management One.
Asked what role each of the partners will play in MMCP, Sachiko said Marubeni will be the “main management body”, Mizuho will be responsible for compliance, and Asset Management One will serve as fund administrator.
Marubeni is one of Japan’s largest trading houses, with wide business interests across the globe in the food, chemical, power generation, and transportation sector.
Mizuho Bank and Asset Management One declined to comment or did not reply to requests for comment.