QIC has reached its A$1 billion ($750.6 million; €646.7 million) hard-cap for the extension of its Global Infrastructure Fund within seven months of starting an additional capital raise for the vehicle.
The QGIF, which initially reached its A$2.38 billion hard-cap in March 2017, saw its capital fully deployed across 10 assets by December 2019. The firm then opted to raise additional capital to target bolt-on opportunities within the fund’s existing assets, QIC partner Kirsten Whitehead told Infrastructure Investor.
“After fully investing the fund’s initial capital, we engaged with all of our existing investors and we had overwhelming support to do another capital raise,” Whitehead said. “We saw quite a significant opportunity to deploy further capital into bolt-on opportunities arising from assets within the fund already, and to further diversify the fund into new thematically linked investments.”
Roughly half of the additional capital raised has been deployed across three assets, including the acquisition of Tilt Renewables; a further investment in US-distributed infrastructure platform Generate Capital, where QIC is a lead investor; and the purchase of US energy platform CenTrio.
Although most of the capital raised will be deployed as bolt-on investments for the fund’s existing assets, a portion of the additional money will be invested in sub-sectors that will help further diversify the QGIF portfolio, Whitehead added.
“Some of the key themes that we think would be really attractive for QGIF relate to decarbonisation, digitalisation and decentralisation,” she said. “Another long-term thematic, which is a strong diversifier for the portfolio, is the healthcare sub-sector.”
According to Whitehead, more than half of the fund’s existing investors participated in the additional capital raise, with over half of the capital raised coming from existing investors. The extension also attracted two new investors.
She said the fund has so far predominantly invested in Australia, with exposure in the US and Europe, and will continue to focus on OECD countries.
“If we could use the momentum from our recent acquisitions and team expansions offshore to target further opportunities outside of Australia, it would be quite positive from a broader diversification perspective for the fund,” Whitehead said. “When we look at overall portfolio construction, we’re seeking to target diversification across sector, lifecycle and geography.
“With the bolt-on opportunities that we have in the pipeline, a large portion of those are Australian, so ideally we would be looking at some offshore exposure through new investments.”