1. Interest in US infra has cooled, says placement agent
CP Eaton Partners says LPs are adopting a “wait and see” attitude towards infrastructure investments in the US. The placement agent cites political and financial obstacles as the chief reason for this.
2. ABP increases infrastructure allocation
The €200 billion pension plans to channel an extra €2 billion into infrastructure investments over the next three years. Infrastructure funds are likely to benefit since ABP has no plans to invest directly.
3. Alinda’s second fund closes oversubscribed by $1bn
Alinda Infrastructure Fund II has reached final close at $4bn, exceeding its cover amount by $1bn while falling $1bn shy of its $5bn cap. The fund received first-time commitments CalPERS and the Oregon Public Employees Retirement Fund.
4. Bidding begins for Hartford parking assets
William Blair & Company is advising the Connecticut capital on a potential long-term concession and lease of its of public parking system, which consists of 1,645 on-street metered parking spaces and 4,751 off-street spaces in the city’s central business district.
5. Macquarie launches mutual fund for infrastructure
Delaware Macquarie Global Infrastructure Fund will invest globally in securities issued by companies that own and operate infrastructure assets, with the exception of Macquarie-managed entities.
6. Los Angeles approves parking deal
The second-largest city in the US now has the authority to qualify bidders for ten parking garages, which may fetch as much as $300 million and help erase the messy image of Chicago’s parking meters deal.
7. Morgan Stanley pushes into Africa, Middle East
Morgan Stanley Infrastructure has teamed with Egyptian construction firm Orascom to raise what could be a multi-billion investment vehicle.
8. China’s Exim Bank targets $1bn infrastructure fund
The Export-Import Bank of China is making an anchor commitment of $300m to the fund, which will invest in infrastructure projects in ASEAN countries. The fund is targeting a final close of $1bn.
9. Announcement imminent on new debt fund
Hadrian’s Wall Capital is set to make an announcement regarding its planned infrastructure debt fund soon (see also article right). In a recent statement, the vehicle is described as a provider of subordinated debt within senior-ranking infrastructure bonds.
10. USS prioritising direct investments over funds
Chief executive Michael Powell said in a recent interview with InfrastructureInvestor that he wants to make the UK pension a leading co-investor in infrastructure. He said the focus for fund investments would be on re-ups with managers the pension already has a relationship with.
Featured commentary from InfrastructureInvestor.com
Here come the debt funds
Although bank financing is beginning to pick up, debt availability is still well beneath pre-crisis levels, creating a clear opportunity for debt fund managers to fill the void. Andy Thomson
In support of the theory that nature abhors a vacuum, a succession of media reports highlighting the moribund condition of infrastructure’s capital markets has been swiftly followed by the unveiling of a new infrastructure debt fund.
InfrastructureInvestor recently learnt that Duet, the asset management firm, would be providing senior debt for short-term bridging facilities for UK PFI projects with the aim of building a £1 billion (€1.1 billion; $1.5 billion) portfolio of assets over the next five years.
Last month, we reported on the establishment of a start-up business – also in the UK – called Hadrian’s Wall Capital. Its planned fund will provide subordinated debt within senior ranking infrastructure bonds, while the firm will also act as a provider of various outsourced services to investors including addressing concerns about the provision of information and control rights.
Duet and Hadrian’s Wall are two quite distinct creatures, but what they have in common is an eye for a new business opportunity. Although banks are beginning to feel a little more emboldened, liquidity is still well down on pre-crisis levels. Together with the demise of the mono-lines, and the consequent difficulties of insuring bond issues, a clear point of tension is developing between the always-vast volume of infrastructure projects in the pipeline and the ability to finance them.
Little wonder that finding ways of rejuvenating the capital markets has moved up government agendas. With public spending in Western countries heavily constrained as a result of the financial crisis, governments are not in a position to fill the funding gap. Hence, for example, the hot spotlight now on pension capital and the fresh impetus behind moves for specialist infrastructure banks.
In this era of tight money supply, private capital providers have their place. To identify a trend based on just two recent fund launches may be rather speculative – but it would be no great surprise if they spawned plenty of imitators given the way the winds appear to be blowing.