With the first SAF “one deal away” from being fully deployed, PEP managing director Evan Hattersley told Infrastructure Investor the firm hopes to start fundraising for a second SAF towards the end of the year, though a confirmed launch date would be contingent on the timing of the initial SAF’s next deal.
“We expect the back end of 2021, or 2022, will be the timeframe we’re looking at [to launch a second SAF],” Hattersley said.
“Hopefully, our demonstrated track record through our first SAF will make that an appealing proposition both to our existing investors as well as to some new relationships that we’ll look to bring into the second fund.”
Like the first fund in the series, the second SAF is expected to be a closed-end fund, with the firm likely to target roughly A$1 billion ($748.9 million; €632.1 million).
“[These] numbers may move a bit as we get closer and have some more discussions with our LPs but, at a high level, that’s the size and structure we have in mind,” Hattersley added.
Launched in 2017, the first SAF reached a first close of around A$400 million in May 2018. Among its investments was the acquisition of New Zealand smart metering business Metrix in December 2018, for approximately NZ$270 million ($188.9 million; €159.4 million).
The fund’s approach – choosing assets with infrastructure attributes not entirely understood by the broader market and then helping those businesses transition to become more “infrastructure-like” under the fund’s ownership – has proven highly successful, Hattersley noted.
“Given where the market has moved over the last three years, that defensive quality, [being] able to demonstrate long-term, predictable cash flows, is very much an attribute that the market is looking for,” he added.
“Our ability to buy [assets] on the edge of that and sell into that pool of infrastructure capital is setting up our portfolio for some strong exit opportunities. At the same time, the defensive nature and essential services aspects of the businesses we’ve invested in through our SAF have enabled them to trade through the last 18 months, and all that has entailed, with very minimal disruption.”