Infrastructure Partners Investment Fund – Core (IPIF-Core), an open-ended fund launched in March 2015, has made its debut investment by committing A$30 million (€19.3 million; $21.6 million) to Utilities Trust of Australia (UTA), an unlisted infrastructure vehicle managed by Hastings Funds Management.
Established by IPIF Management (IPIFM), IPIF-Core was set up to invest in unlisted infrastructure funds, predominantly in UTA. Its first investment follows Hastings’ acquisition of TransGrid, New South Wales' A$10 billion electricity network.
IPIFM founding director Nicole Connolly told Infrastructure Investor that the fund, structured to manage up to A$200 million, is expected to make one to two more investments in the next 12 months, either in UTA or other approved infrastructure fund managers.
To date, UTA has only been open for investment by large institutional investors such as superannuation funds and specialist asset managers.
IPIF-Core aims to provide access to Hastings’ core infrastructure assets to high-net-worth individuals and self-managed superannuation funds (SMSFs), as well as smaller professional investors. The fund is open to wholesale and sophisticated investors with minimum investment of A$100,000.
“SMSFs now represent the largest portion of the A$1 trillion superannuation asset pool, and it is important that these sophisticated investors have access to quality investment products on a similar basis to larger institutional investors such as corporate, retail and industry superannuation funds,” she added.
“Since the fund’s inception, we have raised A$30 million from our target clients as a result of the strong interest from investors wanting to gain exposure to quality unlisted infrastructure assets and we decided to make our first commitment in the beginning of this year.”
Part of Australian investment management group Vasco, IPIFM has a team of executives which includes chairman Steve Merlicek and founding non-executive director Hugh Gurner.
“We have the ability to invest in other infrastructure fund managers, but UTA will remain an important part in the portfolio due to its proven track record,” noted Connolly.
Established in 1994, UTA has more than A$5 billion in funds under management. Its portfolio consists of core infrastructure assets in Australia, Europe and the US, such as Melbourne and Perth Airports, toll roads such as Interlink Roads and a number of regulated assets such as Sydney Desalination Plant, ElectraNet, as well as TransGrid.
“Experience during the past 20 years has demonstrated that an allocation to UTA has enhanced portfolio diversification and provided both distribution and growth returns with reduced volatility,” IPIFM said in its executive summary.
Melbourne-based Hastings currently manages approximately A$12.4 billion across a number of funds and mandates, as at 31 December 2015.