Public and private issuers of debt and equity in the infrastructure sector may soon have a new buyer after the O’Leary Global Infrastructure Fund successfully closed its C$55.2 million (€35.6 million; $45.3 million) initial public offering on the Toronto Stock Exchange today.
O’Leary offered 4.6 million units at C$12.0 per unit along with a combined warrant for unitholders to buy additional shares at C$12.0 per unit before 30 November.
The successful IPO means that publicly-listed infrastructure securities issuers, many of which have found their share prices trading below their net asset values in the last year due to deleveraging pressures and the global credit crisis, will now have a new buyer armed with C$55.2 million in initial capital.
O’Leary’s portfolio will primarily be comprised of publicly-traded equity and debt securities of infrastructure issuers with minimum market capitalizations of C$1 billion, according to a prospectus issued on 29 October. Globally, the fund has identified 400 such issuers, less than 20 of which are in Canada.
But the fund is also authorised to invest up to 20 percent of its total assets in private infrastructure issuers. This may include direct and indirect private equity investments and co-investments, according to the prospectus.
The fund will look to invest in infrastructure security issuers globally in the power, transportation, communications, environmental and infrastructure development sectors.
Initial monthly cash distributions of C$0.06 per unit will be payable starting on 15 January 2009 to unitholders of record on 31 December.
Managed by Toronto-based asset management firm Gencap Funds, the O’Leary Global Infrastructure Fund is named for Kevin O’Leary, Gencap chairman and owner. O’Leary, a well-known Canadian investor thanks to his hosting of a business television program, co-founded Gencap along with Canadian investment firm Stanton Asset Management.
CIBC World Markets, RBC Capital Markets and BMO Capital Markets co-led the syndicate of agents for the IPO, which also included Scotia Capital, Wellington West Capital, Dundee Securities Corporation, HSBC Securities, Raymond James and Richardson Partners Financial.