Marubeni’s infra fund falls short of targeted first close

MM Capital Partners failed to reach its first close target of ¥30bn for its maiden infrastructure fund due to some investors demanding more seed assets before committing capital.

Marubeni-led MM Capital Partners has held a first close on its maiden infrastructure fund on around ¥20 billion ($180 million; €160 million), falling ¥10 billion short of its initial target.

Marubeni spokeswoman Sachiko Matsushita told Infrastructure Investor: “Some investors need to see more seed assets in the fund to avoid blind investment.

“One of the Korean investors postponed their commitment after April. However, as the fund is raising capital successfully, we decided to hold a first close at this stage.”

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.

MM Capital Partners, which was launched by Marubeni, Mizuho Bank and Asset Management One in January, is seeking to raise ¥50 billion by March 2020.

“We may have two other closings in the second and third quarter of 2019,” Matsushita said. She added that the fund would acquire “at least three assets” in 2019 and revealed that it had already acquired a portfolio of energy assets previously owned by Marubeni.

Matsushita said the fund was also planning to buy two railway assets in Australia that are part of Marubeni’s portfolio, though she declined to give any further details.

As of 2016, Marubeni owned stakes in Australia’s Gold Coast Light Rail PPP project and Sydney´s North West Rail Link PPP.

MM Capital Infrastructure Fund 1 will invest in brownfield transport and energy infrastructure with a focus on OECD countries. This will include assets developed and currently owned by Marubeni.

In January, Matsushita told Infrastructure Investor that MMCP had established a mechanism to require major LPs’ approval in order to avoid conflicts of interest whenever the fund purchased assets from Marubeni.

Marubeni is one of Japan’s largest trading houses, with interests across the world in the food, chemical, power generation and transport sectors. It owns a 90 percent stake in MMCP, with Mizuho Bank and Asset Management One each owning 5 percent stakes in the fund manager.