Patria fund raises $145m for debut open-ended listed fund

Brazilian private equity firm Patria Investimentos raised R$800 million ($145.7 million; €122.6 million) for its first publicly listed fund targeting the country’s private infrastructure market.

Patria Infraestructura Energia Core is the first vehicle of its kind for the asset class in Brazil. The firm raised the open-ended fund’s capital from 4,500 individual Brazilian investors with an average ticket size of around $30,000, according to Andre Sales, chief executive of the firm’s infrastructure division.

Patria’s decision to launch the “yield-focused” fund, which is a departure from the firm’s 14-year strategy to invest in developing infrastructure assets, came as Brazil’s interest rates have fallen and individual investors have sought low-risk options that provide better returns than government bonds, Sales said. The fund being listed on the Brazilian stock exchange allows investors a quick exit from the vehicle.

“What we decided to do was to create another area of investment that attends to a different type of investor, one which seeks a type of investment that has way less risk and a constant return,” he explained. “It’s a combination of an attractive return, limited risk and liquidity.”

The initial fundraising period for PICE lasted around two months and was offered to clients of Brazilian banks Itau and XP, Sales said. Patria collected enough capital to fund PICE’s first investment, which will be to purchase stakes in three wind projects once the transaction closes. The firm will raise capital on a deal-by-deal basis.

The firm is targeting low double-digit returns for investments in operating renewable energy projects and power transmission assets only in the Brazilian market, Sales added. “We must invest in assets that use the same currency as the investors,” he said.

PICE’s structure follows a similar model Patria has used to target Brazil’s real estate sector over the past decade, which has seen net assets increase from R$19 billion in 2011 to R$169 billion last year.

“Looking ahead, I believe that institutions will look into this product and see it is an opportunity for an attractive return with limited risk,” Sales said.

Patria is 14 percent owned by US private equity firm Blackstone. The firm operates throughout Latin America and has raised four infrastructure funds. Its most recent fundraise closed in August on $2 billion and is focused on investments in the logistics, energy and telecommunications sectors.