Pantheon is preparing to launch a new London-listed infrastructure fund, with the aim of raising an initial £300 million ($408.2 million; €353.2 million).
Pantheon Infrastructure plc (PINT) is the London-headquartered firm’s first infrastructure fund to be listed on the London Stock Exchange, with its previous three infrastructure co-investment funds (the third of which raised $2.2 billion in 2019) raised through the private markets. A fourth instalment of Pantheon’s private Global Infrastructure Fund series was launched earlier this year.
However, Richard Sem, partner and head of European infrastructure at Pantheon, said the group wanted to make its offering available in a more public form, and that there was space in the market for such a product.
“There’s normally quite a unique set of investors who invest in private markets,” he told Infrastructure Investor. “PINT provides a more liquid solution to getting access to private markets. It’s a very fee-efficient way to access infrastructure.”
Sem was a director of infrastructure at InfraRed Capital Partners between 2011 and 2015, which included working on the group’s London-listed HICL Infrastructure fund.
“I thought the listed space was an interesting way to provide access to infrastructure assets for pension money,” he explained. “And when I joined Pantheon in 2017, the institution already had over 30 years’ experience operating Pantheon International, a listed private equity vehicle.”
The listed offering will follow the same strategy as the private funds and will invest in the same assets alongside the unlisted vehicles. Pantheon’s infrastructure funds principally target deals in Western Europe and North America, with a small allocation to Asia-Pacific. While Pantheon Infrastructure plc has a stated net return target of 8-10 percent, the group’s private markets funds have generated a net IRR of 16.7 percent and a multiple of 1.35x, according to a Pantheon statement. Recent co-investments are believed to have seen Pantheon invest in Stonepeak’s $8 billion acquisition of Astound Broadband in North America and in ICG’s investment in Australian bus business Kinetic.
“We’re somewhat sector agnostic, apart from avoiding assets whose principal operations are in restricted sectors like coal, oil and mining,” said Sem. “We want to operate a broadly unconstrained strategy and just find the best relative risk-adjusted returns we can at any one point in time. It’s about deal selection and partnering with sponsors in complex situations to provide underwritten capital – situations where some sponsors are short of capital and want to have better diversification within their main funds programme.”
Pantheon’s global infrastructure team managed $16 billion in assets as of 31 March 2021. It said it currently has a pipeline of co-investment opportunities in active diligence of over £1 billion, predominantly on a no management fee, no carried interest basis. Pantheon will seek to deploy the proceeds of the IPO in eight to 12 assets and expects to deploy the proceeds within nine to 12 months of the funds being raised.