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Marubeni infra fund reaches second close on $325m – exclusive

The debut infra vehicle is aiming to purchase two Australian transportation PPPs from the Japanese trading house by November.

The maiden fund of Marubeni-led MM Capital Partners reached a second close on ¥35 billion ($325 million; €296 million) last week, Tomohide Goto, the president and chief executive of the firm, told Infrastructure Investor.

MM Capital Infrastructure Fund 1, which is aiming to raise ¥50 billion by March 2020, will invest half of its capital in operational assets owned by Marubeni, including a portfolio of energy infrastructure assets and two transportation PPPs in Australia, according to Goto.

The firm has already purchased the energy infrastructure portfolio though it declined to disclose further details about the types and number of assets. As for the two transportation assets, Goto said MM Capital Partners is aiming to acquire them in November, but declined to elaborate.

According to previous statements, Marubeni owns stakes in Australia’s Gold Coast Light Rail PPP project and Sydney’s North West Rail Link PPP.

“The rest of the fund will be deployed through acquisitions of third-party assets located in OECD countries, with a focus on transportation and energy infrastructure assets,” Goto said.

After its first close, which fell ¥10 billion short of its initial target, Marubeni said in a statement that four LPs had committed capital to the fund: MG Leasing Corporation, a firm 50 percent owned by Marubeni; Korea Investment Management; Fuyo General Lease; and Shinsei Bank.

Goto declined to provide details on new commitments for the vehicle.

The fund will have a 14-year life span, including a four-year investment period, and will target high single-digit returns, a spokeswoman for the fund, Sachiko Matsushita, previously said. The minimum ticket size for each deal will be around ¥500 million, according to the spokeswoman.

Marubeni owns a 90 percent stake in the asset manager, while the remaining 10 percent is split between Mizuho Bank and Mizuho-owned Asset Management One.

Asked about possible conflicts of interest arising from the acquisition of Marubeni assets, Goto said that managing such risk was “very important” for the operation of the fund, and that all investments included counter-measures to avoid potential conflicts of interest.

According to the chief executive, a chief compliance officer with the GP monitors the investments of the vehicle, which also need to be approved by an advisory committee including the fund’s LPs.

Marubeni is one of Japan’s largest trading houses, with wide business interests across the globe in the food, chemical, power generation, and transportation sectors.