Partners raises €1bn, eyes emerging markets

The Zug-based manager has raised its largest global infrastructure fund to date, and expects to grow its infrastructure platform the fastest.

Zug, Switzerland-based fund manager Partners Group has held a final close for its Partners Group Global Infrastructure 2012 (PGGI 2012) fund on €1 billion, with the firm preparing to diversify its global platform with continued investments in developed markets and an increased focus on greenfield projects in emerging markets, according to a statement.

The €1 billion capital haul represents Partners’ largest vehicle raised for infrastructure to date, and is about twice the size of the firm’s 2009 predecessor fund. PGGI 2012 was raised over about one and a half years, and will invest in direct, secondary and primary opportunities in the private infrastructure space worldwide, looking especially to “profit from market segmentation and to actively take advantage of valuation differences,” according to the statement.

The firm intends to invest at least 70 percent of the 2012 program capital in developed markets, a firm spokesman told Infrastructure Investor. However, the firm is also finding ample opportunities in emerging markets, and expects to continue making investments in the Asia-Pacific and Latin America going forward.

Investors in the vehicle included a mix of new and re-upping institutions, comprised of public and corporate pension plans, endowment funds and foundations, insurance companies and financial institutions.

At the time of closing, PGGI 2012 was already 35 percent-committed across eight primary infrastructure assets and three secondary opportunities. The fund already has investments across four continents, with some of its prominent deals including an initiative to construct a series of photovoltaic solar power plants across Southeast Asia and an agreement to acquire a pipeline operator and compression station in Latin America.

“We anticipate fundamental trends for infrastructure investment requirements to remain unchanged and, as these funding requirements are not financeable by traditional sources, infrastructure spending by private investors to become increasingly important as a result,” Michael Barben, partner and co-head of private infrastructure, said in the statement.

In a recent earnings call, the firm also expressed the intention to focus more of its energies on infrastructure on emerging markets while retaining a global mandate. With governments pulling back from infrastructure funding, emerging markets are “increasingly coming up”, chief financial officer Cyrill Wipfli said on the call. Returns for infrastructure are also particularly attractive when investors can enter into projects at an early stage, he added.

Partners also emphasised its intention to build up its infrastructure team in both developed and emerging markets. Co-chief executive Christoph Rubeli pointed out that in emerging markets early entrants into the infrastructure space are starting to run into difficulties, which provides a significant opportunity for hiring staff. 

Partners recently promoted Benjamin Haan, head of private infrastructure in Asia-Pacific, to managing director.

In all, the firm’s infrastructure platform netted 34 percent growth last year, though it remains the firm’s smallest asset class, now totaling €3 billion of its €31.6 billion in assets under management. However, Partners has also highlighted infrastructure as the platform it hopes to grow the fastest.