Some infrastructure managers “seem to be going a little off-piste” regarding some of their investments, according to Angelika Schöchlin, senior partner at Antin Infrastructure Partners.
Stating that Antin focuses on downside protection, long-term contracts and high barriers to entry, Schöchlin told attendees at Paris InfraWeek that she sees some of this discipline missing from the market.
Her comments come at a time of record fundraising, with the amount raised to date already making 2018 the biggest year on record, with $68.82 billion raised by 43 funds (compared with the $68.16 billion amassed by 74 funds in 2017). This influx of capital means too much money entering the market is now the number one investor concern, according to a recent survey from placement agent Probitas Partners.
“A lot of airports wouldn’t fit our definition of infrastructure but often go down as infrastructure,” Schöchlin said, adding she would “like to think” Antin is remaining on message.
In its most recent investment, Antin last month acquired Sølvtrans, an operator of live salmon transportation services, “which exhibits all of the characteristics we look for”, according to managing partner Mark Crosbie. It also fended off strong competition to land French district-heating group Idex in May.
Laurent Fayollas, managing director of Ardian Infrastructure, until recently the owner of the UK’s Luton Airport, responded that his firm’s core aim is buying essential assets rather than services, adding that it only buys assets where it sees it can add value.
“It depends sector by sector,” he said. “With London Luton [sold to AMP Capital in April], we completely changed the airport. Now we’re looking at roads.”
Schöchlin and Fayollas were joined on the panel by Matthew Norman, head of infrastructure at Crédit Agricole CIB, and Claus Fintzen, head of infrastructure debt at Allianz GI. When asked what they see as their biggest investment opportunities, the duo both said US infrastructure, stating the large untapped potential of that market.
Fintzen added that one of the biggest challenges in the sector remains finding the right assets with the right risk-return profile. Fayollas agreed, but was hopeful of opportunities that could arise closer to home, from upcoming French privatisations.