Ping An launches infra fund-of-funds strategy with ‘top-quality’ seed assets

European secondaries specialist Ardian will act as anchor investor and offer current partners the opportunity to become LPs alongside it, a source said.

Ping An Insurance Overseas, a subsidiary of the world’s largest insurance firm, is using several existing commitments to infrastructure vehicles as seed assets in a newly launched fund-of-funds and co-investment strategy.

Dennis Chan, head of infrastructure at the Hong Kong-based asset manager, told Infrastructure Investor: “The funds [launched] are attractive because the seed assets are commitments to top-quality funds and co-investments with global infrastructure managers that are difficult to find in the secondary market.” Chan did not provide details about the seed assets themselves.

He said Ping An Insurance Overseas would launch two vehicles within a single structure: the Global Infrastructure Funds, which would have a total size of $758 million.

Ping An said in a statement that French private equity firm Ardian, which manages more than $50 billion through its fund-of-funds vertical, had become an anchor investor in the Global Infrastructure Funds. It added that the fund-of-funds strategy has already reached a final close.

However, a source with direct knowledge of the deal told Infrastructure Investor that Ardian would underwrite the amount needed to reach the $758 million target, thereby implying that it had not yet been reached.

In addition to becoming an anchor investor, the French asset manager will offer its current investors the opportunity to become LPs alongside it in the Global Infrastructure Funds. The strategy will focus on transportation, midstream energy, power, utilities and other infrastructure sub-sectors, primarily in OECD countries.

“Ping An wants to show investors we can create a very attractive product, able to attract as an anchor one of the biggest secondary infrastructure fund managers,” Chan said.

Jan Schmitz, head of Ardian Asia and Ardian Germany, said the investment was an opportunity to partner with a “highly experienced team” that the firm had got to know well during the “lengthy bilateral discussions” that had led to the transaction.

“This complex carve-out transaction is the perfect example of what we are able to offer to financial institutions in terms of portfolio and team structuring,” he said.

Ardian declined to comment beyond the press release.

Infrastructure Investor’s source said that Global Infrastructure Funds comprises Fund I, which holds two seed assets; and Fund II, which has a commitment to a “leading US infrastructure fund” and a co-investment as seed assets. Only Fund II will be pursuing new investments in infrastructure funds and co-investments, Infrastructure Investor has learned.

The source said the funds will have lifespans of up to 10 years and aim to generate double-digit returns.

Investors will only be able to invest in the overall fund structure, instead of choosing between Fund I and Fund II, the source said.

Ping An said it would also become an LP in the funds, without providing further details.

Chan told Infrastructure Investor that Ping An Overseas “aims to become a leading asset manager in Asia”. He added that the GP was planning to launch similarly structured funds for infrastructure and other asset classes.

Ping An Insurance Overseas is the insurance group’s main platform for direct investment outside China. It offers a range of investment products, including alternative investments in private equity, real estate and private credit assets.

As of March 2019, Shenzhen-based Ping An’s total AUM stood at 2.56 trillion yuan ($380.1 billion; €338.7 billion), according to the Infrastructure Investor database.