New GIP committee to study covid-19’s impact and help shape future strategy

Global Infrastructure Partners has formed a committee – including internal experts as well as advisors from the Boston Consulting Group – to study risk and investment opportunities during and after the covid-19 pandemic.

The committee was formed to “come up with a house view” around what type of economic recovery may take shape in the coming months and years, and how the investment thesis around infrastructure may be impacted, according to a source familiar with GIP’s strategy. The source told Infrastructure Investor the group is updating GIP’s investment committee every month about “the economics on the back” of the pandemic.

Tom Horton, a partner at GIP, is leading the effort, and the firm has hired BCG to help form an investment strategy, the source added. Horton joined GIP in April 2019 after previously leading American Airlines as chief executive. He currently serves as the lead director of General Electric’s board of directors and also sits on Walmart’s board.

The New York-based manager created the group in the aftermath of March’s economic collapse, according to documents made public by the Santa Barbara County Employees’ Retirement System, which has previously committed capital to GIP funds. The documents state the committee will “look at [the] long-term impact of [the] virus [and] provide [a] basis” for pandemic-related risks and GIP’s investment strategy “going forward”.

SBCERS committed $15 million to Global Infrastructure Partners IV, which closed in December on $22 billion, and $15 million to GIP III, a $15.8 billion fund closed in 2017. In the documents, GIP III was generating a since-inception IRR of 7.16 percent for SBCERS.

In addition to deploying GIP IV, the firm is expected to close over the summer two infrastructure debt funds – GIP Spectrum Fund and GIP Capital Solutions Fund II – on a combined $2.5 billion.

GIP declined to comment for this story and BCG did not respond to a request for comment.