The Philippine Investment Alliance for Infrastructure (PINAI), a $625 million fund managed by Macquarie Infrastructure and Real Assets, had been yielding net returns of more than 13 percent as at the end of 2017, according to the Government Service Insurance System, the Philippines’ largest state pension and the fund’s biggest LP.
“The greater returns that this fund is generating helps GSIS to lengthen its actuarial life, which currently stands at 35 years, that will enable us to fulfil our current and future obligations to our members and pensioners,” Jesus Clint Aranas, president and general manager of GSIS, said in a statement.
According to Janette Hall, a director in the private sector operations department at the Asian Development Bank, another of the fund’s LPs, PINAI’s performance has further improved, achieving a gross return of 16.5 percent, or a net return of 14 percent, as at end March 2018.
While MIRA has said it will not launch a follow-on fund – MIRA’s global head Martin Stanley told us in a March interview that the country is now a key part of its pan-Asian strategy – it will continue to target the Philippines.
“Each of the PINAI investors is in separate discussions with […] MIRA to explore infrastructure opportunities in the Philippines,” Hall told Infrastructure Investor.
Launched in 2012, the 10-year closed-ended fund is the first and largest infrastructure fund dedicated to the Philippines, targeting equity investments in a mix of both brownfield and greenfield projects across a range of infrastructure sub-sectors. GSIS was the largest investor in the vehicle, committing 16.764 billion pesos ($314 million; €272 million), equivalent to some $400 million at the time. ADB pledged $25 million, with Dutch pension manager APG and MIRA providing the remaining funds.
According to GSIS’s statement, over the past five years, the fund has invested in three renewables projects, spanning across wind and solar, as well as a coal-fired power plant. Other investments include the Philippine Coastal Storage and Pipeline Corporation in the Subic Bay Freeport Zone and the LRT 1 Metro in Manila.
GSIS, whose assets under management totalled 1.09 trillion pesos as of November 2017, said it would continue to invest in private infrastructure assets through funds, alongside other investors, in a bid to further diversify its assets and generate higher returns. Aranas added that the pension also looks at global assets for diversification.
APG declined to comment on the PINAI, while MIRA and GSIS had not responded to queries at the time of publication.