European promise to bring new fund for Blackstone
After completing its €12.7 billion take-private of Italian transport giant Atlantia in December, Blackstone wants more from Europe.

The firm is thus understood to be planning the launch of a European infrastructure fund, replicating the open-end nature of its current Blackstone Infrastructure Partners. The latter has amassed $35 billion since its 2017 launch and is generating a 19 percent IRR, despite only targeting 10 percent. BIP, by design, can only ever have a tilt of up to 30 percent towards Europe. With the preparations at an early stage, there is no word yet on whether the new fund will see the return of Saudi Arabia’s Public Investment Fund, which is funding up to $20 billion of the main vehicle.

Blackstone declined to comment, but eagle-eyed Infrastructure Investor readers shouldn’t be surprised by this move. In our September 2021 interview with the manager, Blackstone president Jon Gray told us: “We’re focused on the US now, but over time I think there’s an opportunity to do things more regionally. And that would obviously be Europe and Asia because those are both very large infrastructure markets.”

Europe’s time appears to have arrived. We’re waiting on Asia’s, then.

Green with envy, Australia rethinks hydrogen strategy
The US’s Inflation Reduction Act is making waves much further afield than intended. Australia is set to revise its National Hydrogen Strategy in an effort to stay competitive, as developments encouraging investment in green hydrogen in the US – and elsewhere – threaten to leave it behind.

Australia’s minister for climate change and energy, Chris Bowen, said this week that the country’s hydrogen strategy, written in 2019, was found to be “out of date. It needs to be revised and refreshed, particularly in light of international developments, including the IRA,” Bowen told a press conference.

Under the IRA’s tax credit regime, as much as $3 per kilogram could be provided in subsidy for clean hydrogen production up to 2032. Given things are also now looking up for the renewable hydrogen sector in India, Japan and much of the EU, it seems that rethinking Australia’s hydrogen strategy couldn’t be more timely.

Got €50? You can invest in DWS’s new infra retail fund
German infrastructure fund manager DWS is making investment in unlisted infrastructure accessible to retail investors at home with the launch of an open-end mutual fund.

The new vehicle will also raise capital from institutional investors, but private investors will be able to invest as little as €50, Peter Brodehser, partner, infrastructure investments at DWS, said in a statement.

Targeting returns of between 4 and 5 percent, the fund will invest in the EU, focusing on renewable energy, as well as digital infrastructure, sustainable transport, grids and social infrastructure, a spokesperson for DWS told The Pipeline.

DWS is the latest to launch an infrastructure investment product whose reach goes beyond institutional investors. Other infrastructure fund managers that have started doing the same include KKR, which last October announced the launch of its “democratised infra” product; and GIP, which two weeks later tapped long-time senior executive Mark Levitt to lead US family office coverage.

Looks like infra retail is increasingly in style.

Essentials

Check out the winners of Infrastructure Investor’s Annual Awards 2022!
We all know 2022 was a difficult year. All the more reason, then, to honour the sector’s managers, investors and advisers who have excelled in their respective fields from across Europe, the Americas, Asia-Pacific, the Middle East and Africa. Now in its 14th year, Infrastructure Investor’s Annual Awards remain the only honours voted for by the industry.

Throughout December and early January, we invited our readers to cast votes online across 60 categories to choose who merited the top spot in each. We then meticulously analysed the results to ensure they comply with our strict rules and to determine the winners.

Want to know who made the cut? Click here to find out.

Grapevine

“You can’t be in a situation where you’re flogging off the family jewels or the family home to pay off the credit card”

Ahead of an election, Chris Minns, the leader of the opposition Labor party in New South Wales, cans the idea of further asset recycling

Who’s hiring

OTPP’s Lezama joins CBRE IM
CBRE Investment Management’s private infrastructure team now includes Kerron Lezama, who has been named senior director and reports to Andreas Köttering, the group’s head of European private infrastructure. CBRE’s private infrastructure team counts 65 people across Toronto and London.

Lezama joins from a two-year stint as a managing director at Ontario Teachers’ Pension Plan, where he was responsible for origination and asset management of infrastructure investments across EMEA. In particular, he worked with OTPP’s portfolio companies Birmingham Airport and Caruna. Lezama previously worked at advisory group Evercore for 11 years.

The open, long-term lens Lezama would have applied at OTPP is one thing that won’t be changing, with much of CBRE’s infrastructure investments coming through its 2019-vintage, open-end CBRE Caledon Global Infrastructure Fund. Although, according to a CBRE statement, he will also be “supporting the development of infrastructure investment strategies” for CBRE.

More to come?

LP watch

ARTful appointments
The A$200 billion ($135 billion; €127 billion) Australian Retirement Trust – the country’s second-largest superannuation fund following the merger of Queensland-based funds QSuper and Sunsuper – has celebrated its first birthday as a merged entity with a trio of senior appointments.

The most eye-catching for infrastructure investors is the appointment of Guy Debelle as an external adviser. Debelle is a former deputy governor of the Reserve Bank of Australia and a current director at Fortescue Future Industries, a firm making a big push into hydrogen and other forms of clean energy.

Debelle told the Australian Financial Review that he was drawn to the job with ART because Australia needs “a hell of a lot more infrastructure” in renewable energy, representing “a huge opportunity from an investment point of view” for the superannuation sector.

DeBelle certainly not dampening expectations, then.

Deals

So long, farewell to Macquarie, as Energie Steiermark returns to Austrian ownership 
Macquarie Asset Management has sold its shares in Austrian energy utility Energie Steiermark to the state of Styria, which founded the company in 1996 and already held 75 percent of the shares.

The state of Styria had the right to first refusal and, following the €525 million deal, now has complete ownership of the company. The state said it would likely sell the shares again at a later time.

According to the Styrian government, the real market value of the deal was between €628 million and €738 million. Styria’s deputy governor Anton Lang said the dividend accrued from the new shares is higher than the cost of financing the deal.

Sources close to the situation say the valuation was in line with Macquarie’s expectations, following indicative offers received during the first stage of the process.

The sale comes as the €2.75 billion 2013-vintage European Infrastructure Fund IV is winding down. The fund sold Open Grid Europe in late January and its remaining portfolio companies include AGS Airports, Towercom, Czech Gas Networks and Hydro Dolomiti Energia.

EQT plugs into digital to strengthen core
Last January, Sweden’s EQT launched its first core infrastructure product, known as EQT Active Core Infrastructure. Now, over a year later, the fund – a 25-year vehicle targeting €5 billion – has made its first investment, in digital infrastructure firm Radius Global Infrastructure.

The investment was made in conjunction with Public Sector Pension Investment Board and is a take-private of the New York-listed company, which owns properties leased to telecommunications sites. The deal represents a 28 percent premium on Radius’ share price on 24 February.

Given that the types of properties Radius owns – cell towers – only came to be considered as core infrastructure in recent years, we wonder what will fill that bucket when this 25-year fund begins to wind down…

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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