The Pipeline: Alinda off midstream, I Squared’s EM sidecar, Ember anchor LPs

Alinda rejects midstream, I Squared to raise emerging markets sidecar and some good news for first-time funds.

First look

Is midstream too volatile? Alinda thinks so

Sun has set: Alinda ditches midstream for new fund

“As ‘perfect storm’ hits energy, is midstream just too volatile?” That was the question headlining our April Deep Dive on the sector. As it turns out, Alinda Capital Partners had already made up its mind in January to exclude midstream from its latest vehicle – the $2 billion Alinda Infrastructure Fund IV, now in fundraising mode – before the pandemic and the Saudi-Russia oil price war.

“The construct that midstream investments did not take on commodity risk had proven to be a myth,” a source familiar with Alinda’s decision told us, echoing some of the findings in our piece.

The change in strategy, first reported by Bloomberg, is one of several the firm has made in recent years. They include abandoning fundraising efforts for a core infrastructure vehicle, as well as closing Fund III on $1 billion in 2018, well below its original $4 billion to $5 billion target.

Fund IV will invest in digital infrastructure, transportation, logistics and utilities-related assets.

Alinda declined to comment.

I Squared offers $2bn exotic getaway

After being in lockdown for so long, we wouldn’t blame anyone for wanting to take off to somewhere less conventional. I Squared Capital, which is fundraising for its third global infrastructure fund, seems to be thinking the same. Included in its $12 billion offering is a $2 billion emerging-markets sidecar, which it plans to raise and invest across various markets in Latin America and Asia, giving investors the option to invest in the sleeve or not.

If successful, the sidecar would effectively become one of the largest pools of capital dedicated to such markets – at least until Global Infrastructure Partners finishes raising its own emerging markets war chest, that is.

Macquarie wants a piece of the ASPI

A few weeks ago, we told you Italian fund F2i was looking to take embattled concessionaire Autostrade Per l’Italia off the hands of Atlantia and its other investors. Last week, Reuters reported that Macquarie has also joined this race and that it could look to bid with state lender CDP, or even with F2i.

Whichever way it ends up, Macquarie will definitely need an Italian touch. In a parting shot to ASPI’s current foreign investors – Allianz, EDF Invest, DIF Capital Partners and China Silk Road – Prime Minister Giuseppe Conte told Italian newspaper Corriere della Sera in January:

“Foreign investors know that even in their countries of origin there are legal systems that provide for very severe remedies in case of breach of contract… When there are 43 victims [from the Morandi Bridge collapse], I would avoid recalling formulas such as ‘legal certainty’ and ‘rule of law’” to appeal against nationalisation.

Duly warned, then.

Bonjour, Paris

We’ve been waiting for a good ‘20 in 2020’ moment and EQT has delivered. Last week, the Swedish firm announced the opening of its 20th global office – and where better to set up shop than in the City of Lights?

The Paris office will be led by Nicolas Brugère, who came to the firm in January from PAI Partners. Thomas Rajzbaum, a managing director in the infrastructure unit who joined in November 2019 from Carlyle, will lead EQT’s French infrastructure team. The move follows last October’s establishment of an infrastructure team in the London office, led by managing director Anna Sundell, who relocated from Stockholm.

Apart from theme-park investment Parques Reunidos – which, pun intended, has turned into a bit of a rollercoaster ride – head of real assets Lennart Blecher recently told us it was “difficult to find a more compelling [infrastructure] investment strategy” than EQT’s.


“If you want to raise money in today’s market, you should call yourself Something Digital Infrastructure Partners”

An LP advisor offers his perspective on what strategies are coming his way at the moment

Who’s hiring

Marino to Generate Capital and ideas

Andrew Marino, formerly co-head of infrastructure at Carlyle, has joined Generate Capital as senior managing director and head of strategy. During his 16-year tenure at Carlyle, he worked on assets such as Terminal One, at New York’s JFK International Airport, and Lone Star Ports. Earlier this month, Generate Capital co-founder Jigar Shah, writing for Infrastructure Investor, called on US leaders to “try something new” and embrace asset recycling, leveraging “public dollars [to] provide a pathway for enormous private investment in all US states and territories”.

Given his experience, we’re sure Marino would agree.

LP watch

Innovative first-timer? We’ve got just the LPs for you

It’s not easy investing in a first-time fund at the best of times, but imagine doing so during a global pandemic. So, kudos to the Ontario Power Generation Pension Plan and Ontario Nuclear Funds for anchoring Ember Infrastructure’s debut mid-market vehicle with $150 million. Ember was founded in 2018 and is led by Global Infrastructure Partners alumnus Elena Savostianova. It’s seeking around $500 million to invest in low-carbon energy, water, waste and industrial/agricultural infrastructure.

Ryan Bisch, Ontario Power Generation’s director for private markets, who manages infrastructure investments for both pension plans, told us he’s been looking for new funds over the past five years, partly because some of the players launched over the last decade have grown very quickly, partly because of the “mismatch between how much new infrastructure needs to be built versus people’s desire to invest into brownfield”. That’s led OPG to search for build-to-core and greenfield strategies. Since not many exist, new funds have moved up the agenda. Relative newcomer Generate Capital is another one of OPG’s bets.

First-timers, you know who to call now (you’re welcome).


Meridiam lands safely in Sofia

Buckle up: A year later, Meridiam and Munich Airport touch down in Sofia Airport

After hitting some turbulence, Meridiam and partner Munich Airport have secured a 35-year concession for the modernisation and operation of Bulgaria’s largest international gateway.

The pair were awarded the concession last July, a decision its four rivals – which included France’s ADP and the IFM-owned Manchester Airports Group – contested in court, lost and later appealed. At the heart of it was the fact that, according to local media reports, Meridiam and Munich Airport were selected on the merits of their development plan – and not the highest bid.

Last week, Bulgaria’s Supreme Administrative Court finally upheld the selection. Although if the current state of airports is anything to go by, it might be up for debate as to who’s really won in this drawn-out process…

Today’s letter was prepared by Zak Bentley. Bruno Alves and Kalliope Gourntis also contributed.

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