Prostar opens HK office, splits fund

The energy infrastructure-focused firm has opened its third office in the Asia Pacific, as it seeks to raise capital for an Asia fund carved out of its global one.

Prostar Capital, the Sydney-based energy infrastructure investment firm, has opened its third office in the Asia Pacific in Hong Kong, after deciding to split its maiden global fund into two regional funds, according to a Prostar spokeswoman.

The Hong Kong office currently has about four professionals, and partner John Troy will be heading up the Hong Kong office. Prostar currently has five professionals stationed in its Sydney office, and two in Singapore, as well as some independent professionals in Seoul, the spokeswoman told Infrastructure Investor. However, the Hong Kong office will primarily provide coverage for northern Asia, including greater China and Japan.

“For the Asia energy infrastructure fund, we would like to get some people on the ground,” she said.

Prostar originally launched its maiden infrastructure fund in early 2012, targeting $1 billion for opportunities worldwide. In November 2012, the firm held a $300 million first close for that fund, with capital committed primarily by telecommunications conglomerate the SK Group in Korea, the spokeswoman said. The firm then began looking at investment opportunities.

However, Prostar has since decided that a global energy infrastructure fund is “too broad”, and decided to split the fund into two distinct niches: one fund targeting the US, and the second targeting Asia. Both funds have a target size of $750 million. $200 million of the first close capital went to the US fund, while $100 million went to the Asia fund.

The Asia fund already has a seed asset – namely, Port Bejaro in the United Arab Emirates. The spokeswoman added that Prostar hopes to hold a first close on the fund in the first half of 2014. Prostar is also expecting to secure a seed asset for the US fund in Q1.

For both its funds, Prostar will be targeting midstream energy infrastructure assets, such as storage terminals and pipelines. The firm’s focus is on brownfield investments, seeking mostly to remarket storage space and improve the efficiency of operations. With a target IRR in the mid to high teens, Prostar is targeting institutional investors worldwide for both funds, the spokeswoman added.