GIP goes further into debt

In the decade-plus since the 2006 launch of Global Infrastructure Partners, Adebayo Ogunlesi’s firm has risen to the top of the equity space. In January, it set the record for the largest unlisted infrastructure fundraising with a $15.8 billion close on its third global equity fund.

With the addition of Jennifer Powers, its first female partner and a former managing director for Tokyo-based Mizuho Bank, the firm looks to build out its nascent debt business. Powers joined GIP after just over two years at Mizuho.

Powers may be new to GIP, but not too many introductions were needed in her first weeks at the firm. Like Ogunlesi, she cut her teeth at Credit Suisse, working for the firm’s energy investment banking and capital markets departments. There, she worked with Ogunlesi and other GIP founding principals before GIP’s launch. 

Powers spent 12 years at Credit Suisse, leaving in 2004 for Royal Bank of Scotland, where she headed the bank’s credit markets business, with a day-to-day focus on power and energy. 

She went over to Mizuho in April 2015, one of about 140 RBS employees who joined the bank as the Scottish firm sold large parts of its North American portfolio. Powers was appointed Mizuho’s co-head of investment-grade debt capital markets, helping to lead the transition of $36.5 billion in loan commitments to Mizuho. The move made Mizuho a top 10 bank in US investment-grade debt capital.

“What Mizuho has done to continually upgrade and rebrand ourselves is to not just be punching a ticket, but to make a difference,” Powers told Business Insider in November 2015, about six months after joining the firm. 

But the chance to reunite with her former Credit Suisse colleagues was one Powers could not turn down.

BUILDING A DEBT PRESENCE

GIP is not new to the debt space; its debt fund, GIP Capital Solutions, closed last year on an undisclosed amount, though Infrastructure Investor data put the total raised at around $1 billion. Known investors include the Oregon State Treasury public pension fund, which committed $200 million to GIP CAPS. Pension documents indicate the vehicle is aiming for a net IRR of between 9 percent and 11 percent, inclusive of a 5 percent to 7 percent cash yield. 

Its investments include a 453MW portfolio of power plants owned by Heorot Power, to which it lent $125 million. The vehicle is targeting energy, transport, water and waste and other assets with “infrastructure-like characteristics”, GIP said in a previous statement. It can do greenfields, brownfields, acquisition finance, restructurings and secondary purchases, among others.

“The credit business is already well under way at GIP,” Powers tells Infrastructure Investor

Still, there is room for growth at a firm that has quickly become a giant in the equity space, with more than $40 billion in assets under management. Adding Powers’ credit experience, the firm believes, will broaden its financing options, especially when it comes to more complicated transactions.

“In order to be relevant to its very strong LP community, within GIP we are focusing on a full suite of products,” Powers says. In the statement, GIP said its credit arm can make “non-equity” investments across the capital stack.  

Powers will work closely with GIP CAPS managing partners Reiner Boehning and Steve Cheng as well as GIP partner Jonathan Bram. Her roots with Bram, another GIP partner, predate even their Credit Suisse days, as the two worked together at investment banking firm Drexel Burnham Lambert.

She continues to see opportunities throughout US infrastructure. At the moment, much of the opportunity lies in power and energy, particularly renewables. In transport, she says, investors have been waiting “with bated breath” for the sector to advance.