First look

Fundraising slowdown? Not for Antin
At least not yet. Though the Paris-listed firm expects “a slower pace” in 2023, for the time being it can bask in the success it achieved in 2022, raising €8.2 billion, the most it has ever raised in a single year and more than double its record €3.9 billion haul in 2019.

According to a Q4 activity update Antin Infrastructure Partners released last week, of the €8.2 billion total, €7.4 billion (€2.1 billion in Q4) went towards Antin Infrastructure Partners V, which launched last June and is well on its way towards reaching its €10 billion target.

Its NextGen Fund I, which the firm launched in Q4 2021 to invest in assets that are currently on the periphery of the infrastructure space, raked in the remaining €800 million (€100 million in Q4), bringing the fund’s total just €200 million shy of its final target.

So, while 2023 may bring with it a slowdown in fundraising, Antin is not hitting the brakes on its targets just yet.

ECP turns east for Japanese opportunities
US-based fund manager Energy Capital Partners is looking to launch a multi-billion dollar fund that will focus on investing in projects supporting Japan’s path to decarbonisation.

The firm is planning to launch the fund this year, and intends to invest in renewable energy projects and companies developing decarbonisation technologies including batteries and renewable fuels, according to a report by Nikkei Asia.

In launching the fund, ECP will lean on the support of Japan’s Sumitomo Mitsui Trust Bank, with the latter co-ordinating with Japanese investors on behalf of the US manager as the firm looks to raise funds from institutional investors both in the country and overseas.

News of the expected new fund comes two weeks after the pair entered a “business alliance”, which will see Sumitomo Mitsui Trust Bank investing in both the firm and its Energy Capital Partners V fund, which Sumitomo said is expected to close in June. Sumitomo will also receive management fees from that and other funds.

No let-up in opportunity, then.

Digital infra funds come to Africa
Africa has its own dedicated digital infrastructure fund after Convergence Partners Digital Infrastructure Fund closed on $296 million, more than 18 percent above target. The fund – raised by sub-Saharan based private equity firm Convergence Partners – was launched in June 2020 and had a first close of $120 million in July 2021. It is the firm’s largest fund to date, representing nearly half its $600 million in capital under management.

LPs comprised pension funds and financial institutions spanning EMEA, as well as development finance institutions such as FMO, Proparco and British international Investment.

In addition to typical digital infrastructure assets such as fibre, data centres and towers, Convergence Partners said targeted investments will also include the cloud, the Internet of Things and artificial intelligence.

Welcome to 2023.

Bp paints black picture of not-green-enough future
The Pipeline has read the bp Energy Outlook 2023 and will sleep with the eco-lights on for a while. According to the report, oil will play a major role for the next 15-20 years, which necessitates upstream investment in oil and natural gas and supports downstream infrastructure for a couple of decades. There’s room for improvement: CO2 emissions have increased every year since the Paris COP in 2015 (bar 2020).

Greener shoots can be found in the impact of the Inflation Reduction Act on US low-carbon hydrogen, which is estimated to increase in use from 4mtpa in 2030 to 26mtpa in 2050, of which 60 percent will be green, up from an estimated 25 percent pre-IRA. The use of bioenergy will grow and be supported by the trend toward locally produced energy, boosting energy security.

bp estimates that Russia’s invasion of Ukraine will lower CO2 emissions by around 5 percent compared with previous expectations, through lower oil and gas demand. By comparison, efficiency gains are set to lower emissions by just 3 percent.

Grapevine

“I want to tell people that I do care about the sewage in our waters… , I really do give a shit about water quality”

Sharing is caring as UK environment secretary Thérèse Coffey warns water companies about sewage spillages.

LP watch

Can’t you hear me knocking?
While the slower pace of fundraising noted by Antin above definitely concerns some in the market, one US pension told The Pipeline they’ve struggled with the number of GPs knocking on their door.

The real assets chief of the public pension scheme said that, traditionally, he’s able to ease into the year and typically doesn’t have fundraising talks with managers until at least the second half of January. This year? New Year celebrations had barely finished before he was inundated with calls from hungry infra GPs on 3 January, wondering when the LP was going to commit.

FOMO? Trying to get one in ahead of whatever other shocks may be down the line this year? One thing’s for sure: 2023 fundraising will have quite a different feeling to record-breaking 2022.

Deals

IFM turns to renewable gas in net-zero search
IFM Investors has acquired a majority interest in GreenGasUSA, an American renewable natural gas developer and operator, as it branches out from vanilla renewables in its search for assets that can aid the transition to net-zero emissions.

The firm is billed as a fully-integrated renewables platform headquartered in Charleston, South Carolina, and uses technology to capture, purify and transport biogas from existing organic waste streams for use as pipeline-quality RNG. It benefits from offtake agreements in place with customers including Mercedes-Benz, Berkshire Hathaway Energy and Duke University.

IFM will make the investment through its IFM Net Zero Infrastructure Fund, an open-end vehicle launched in 2022 with an initial target of $3 billion. GreenGasUSA is the second publicly announced transaction from the vehicle, following a deal worth $1 billion in June to invest in Italian renewables developer ERG.

IFM global head of infrastructure Kyle Mangini said RNG projects “can deliver significant emissions reductions”, which is aligned with IFM’s own company and portfolio-wide net-zero commitments.

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Today’s letter was prepared by Zak Bentley. Kalliope Gourntis, Daniel Kemp, Tharshini Ashokan, Isabel O’Brien and Anne-Louise Stranne Petersen also contributed