The Pipeline: Blackstone infra raises $31bn, GIP looks to private wealth, Antin’s new partner

Blackstone almost doubles fund 12 months after reopening, GIP goes hunting for private wealth and CIP and Ørsted return home for offshore wind. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

Doubling up: Blackstone raises $13bn in 12 months

Double or nothing for Blackstone’s 12-month fundraisingIt may not come close to the $3.1 billion raised in Q2, or indeed, the $2.5 billion raised in Q1, but Blackstone revealed in its recent Q3 earnings that a further $934 million has been raised for the open-end Blackstone Infrastructure Partners, bringing the fund’s total size to $31 billion.

That’s now about $13.2 billion raised since the reopening of the fund late last year, and as group president Jon Gray was keen to tell the earnings call, an almost doubling in the past 12 months of the initial $14 billion raised. Saudi Arabia’s Public Investment Fund, of course, is providing matched funding commitments of up to half of the near-term $40 billion target.

Fundraising may have been lower than the previous quarter, but deployment has significantly increased, with a $2.8 billion outlay compared with the $1.7 billion invested in Q2. January’s agreed $3 billion investment in Invenergy was one of the large deals completed, Gray pointed out.

Small clean steps Down UnderThe Clean Energy Investor Group, an organisation that advocates for renewable energy investors in Australia, has found that investor confidence has improved Down Under – but there are still significant risks deterring investment in renewables.

In its Investment Confidence Survey for Q1 2022-23, covering the three months to the end of September 2022, CEIG found that collaboration among Australia’s state and federal energy ministers was leading to increased optimism, including a “very positive” response from investors to the adoption of national, legislated climate targets.

But investors “remain cautious because Australia needs to deliver an extraordinary amount of transmission in a short period”, said CEIG CEO Simon Corbell, adding that it would be difficult to keep plans to develop the country’s National Electricity Market on schedule “given supply and workforce constraints, as well as planning issues”.

Emissions reduction targets are now in place in Australia after years of lobbying. But it’s going to be costly – and there seems less confidence that the current deadlines can be met.

US wind repowering given new gust
The growing US wind repowering market is set for a boost from the newly extended production tax credits, according to renewables researcher IntelStor.

In a recent research note, IntelStor stated 101 wind energy projects have been repowered in the US to date, with 47GW of operational wind energy capacity currently needing repowering. Now, under the IRA’s 10-year extension, these projects will requalify for a PTC. Given that repowering rates have been on the rise since 2017, expect more to come.

This is building on what IntelStor says is an increasingly more capital-efficient industry, less reliant on tax credits. “The PTC would provide a higher percentage of the contribution to the overall financial performance of an individual project site. So, the expiration […] can necessarily dent the otherwise healthy financial returns for an asset owner, but not entirely destroy them”.

As to whether or not those credits will be rescinded in 10 years… the answer is blowin’ in the wind.

Essentials

2022 awards: Send us your submissions!It’s global awards time! Infrastructure Investor’s annual awards remain the only infrastructure honours decided solely by the industry. After another very successful edition last year, with thousands of votes cast for our 60-plus categories, we are hoping for an even bigger 2022. If you’re wondering what should go into your submissions, we’ve compiled a handy guide for your convenience.

We are getting the ball rolling by inviting you to submit your firm’s achievements in 2022 by Tuesday 22 November. Don’t miss your chance to do so HERE.

Grapevine

“You’re waiting to see what comes out, but there’s none of the salmon maki that you really like, or it’s too expensive. So, you go into the kitchen and start making it yourself”

Vincent Gerritsen, head of UK and Europe at Morrison & Co, speaking to the Australian Financial Review, in what may be the asset class’s first sushi analogy

Who’s hiring

GIP hunting for billionairesOne of the longest serving senior staffers at Global Infrastructure Partners has undertaken a new role in a bid to secure funds from private wealth sources.

Mark Levitt, who joined the firm in 2009 and was most recently chief of staff, has been made responsible for GIP’s US family office coverage, as the infra titan looks to take advantage of – explored by affiliate title Private Equity International this year – the growing link between private wealth and private equity. Having raised the world’s largest infra fund at $22 billion in 2019 and thought to be eyeing a further $25 billion for its latest flagship, the group believes it has not fully explored the depths of infra capital.

To help manage that load, GIP has also hired Celeste Mellet as chief financial officer from Evercore. Mellet is believed to have been appointed to work alongside existing CFO Gregg Myers, with one focusing on the financial management of the funds business and another on general business finances.

No stopping the infrastructure gravy train, it seems.

Antin adds new partnerAfter 11 years as managing director within Goldman Sachs’ investment banking division, Francisco Cabeza has left to join Paris-based Antin Infrastructure Partners as a partner.

Based in London, Cabeza will focus on both the firm’s flagship and mid-cap strategies in Europe, a spokesperson told The Pipeline. “He will cover all sectors under the oversight of the senior partners,” the spokesperson added.

Cabeza brings 18 years of experience to his new role, which he assumed this month, having worked at a number of companies, including Spanish transport concessionaire Iridium and RREEF Infrastructure. Since joining Goldman Sachs in 2011, he has served as head of M&A in Iberia, focusing on infrastructure, renewable energy, telecoms and private equity.

When asked whether his appointment was an indication of Antin focusing more on Spain and Portugal, the spokesperson responded: “We are reinforcing diversity/complementarity of the partnership by adding another Southern European national.”

Things aren’t heading south for Antin just yet.

LP watch

UK investors cool on infraThe UK may have new leadership, but the fallout from the previous government’s ironically named ‘mini budget’ continues.

snap poll of UK investors, carried out on 18-19 October by bfinance, showed that just under 40 percent of them plan to increase their exposure to the asset class over the next 18 months. That’s a decrease from the more than 50 percent that had intended to grow their exposure when the consultancy previously quizzed them in early- to mid-September. What’s more, while less than 5 percent of investors thought of decreasing their exposure to the asset class in September, that number had grown to just over 20 percent come October.

The change in sentiment is part of a wider cooling off towards private markets. In early- to mid-September, only 4 percent of investors planned on cutting their exposure to private markets – that number grew to 24 percent in the October survey. Zoom in on corporate pension plans, and the souring is even more pronounced, with a whopping 80 percent now intending to cut their private markets exposure.

A country-specific snapshot of a moment in time, or a sign of wider changes to come?

Deals

No place like home: Ørsted and CIP bring international experience back to Denmark

Danes return home to develop 5.2GW of offshoreAfter pioneering offshore wind development globally, Danish giants Ørsted and Copenhagen Infrastructure Partners are coming home to develop four offshore projects with a combined capacity of 5.2GW. Denmark currently has 2.3GW of offshore wind capacity, and the projects will be outside of the usual tender process and hence subsidy free.

The pair aim to commission the first turbines by 2027-28. Given that recent Danish developments have taken at least nine years from planning to commissioning, this timeline is nothing if not ambitious.

However, the partnership likely won’t come cheap, judging from the estimated €2.2 billion price tag attached to RWE’s 1GW Thor project, currently the largest offshore wind farm being developed in the country. That said, money should not be an issue. After all, CIP recently announced that it will launch a mega-fund early in 2023. If recent achievements are anything to go by, there will be no lack of interest in it.


Today’s letter was prepared by Zak Bentley. Bruno AlvesKalliope GourntisDaniel Kemp, Isabel O’Brien and Anne-Louise Petersen also contributed