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The Pipeline: Brookfield’s fundraising momentum, Carlyle bulks up energy unit, IFM’s $11bn data debut

First close imminent for Brookfield, Carlyle adds co-head to energy unit and IFM joins the data centre rush. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

Spinning out: Brookfield to sell off 25 percent of high-flying asset management business (Source: Getty)

First close for Fund V imminent amid BAM spin-off
The headline news of Brookfield Asset Management’s Q1 2022 earnings will be its parent company’s decision to spin off 25 percent of the company by the end of the year, which will provide “existing and prospective shareholders the ability to own a direct interest in our pure play as an asset manager”, according to CFO Nicholas Goodman.

However, there remains plenty of momentum on the infrastructure fundraising front. The flagship Brookfield Infrastructure Fund V, targeting $25 billion, is expecting a first close in Q2, while BAM also launched its third infrastructure debt fund in February. No target was disclosed for the vehicle, although chief executive Bruce Flatt told analysts: “We have received strong investor engagement. We expect that this fund will be significantly larger than the previous vintage.” Given Fund II closed on $2.7 billion in December 2020, that will be some sizeable effort.

Flatt also reiterated that its Brookfield Global Transition Fund will “soon” close on $15 billion. Looks like a busy 2022 for the BAM IR folks.

‘First of its kind’ impact fund á la Banque Postale-style
La Banque Postale Asset Management has reached a €270 million first close for its new impact fund. But unlike other SFDR-compliant Article 9 funds, this one is a debt vehicle. The LBPAM Infrastructure Debt Climate Impact Fund, which has a target of €500 million and a hard-cap of €700 million, will invest in renewable energy, electric transportation and energy efficiency, the French asset manager said in a statement.

The strategy will be led by LBPAM’s head of infrastructure debt Bérénice Arbona, investing in 15 to 20 projects over a three-year investment period. A first investment is already underway – the financing of a new biomass cogeneration plant that will produce electricity and steam for a French industrial site.

In a statement, LBPAM’s head of real and private assets René Kassis hailed the fund as a “first of its kind in Europe… crossing the border from ESG integration into impact”, which will “launch new strategies that combine search for yield with climate and social impact”.

Eurazeo’s maritime fund more than halfway to target
Eurazeo’s Sustainable Maritime Infrastructure Fund has secured a €70 million commitment from the European Investment Fund, bringing its fundraising total to €200 million.

The fund, which was launched in April 2021 and has a target size of €350 million, is focused on the net-zero transition of the global maritime industry and intends to finance three types of assets in particular – environmentally friendly vessels, port infrastructure and equipment aiding ecological transition, and assets supporting offshore renewables.

A recently completed deal – the financing of a Harren & Partner Group jack-up vessel used for the development of European offshore wind farms – is “the first in a series of transactions”, the firm said in a statement, anticipating as many as 50 European businesses operating small/medium-sized vessels could be supported by the fund.

Just €150 million more to tug it to a close, then.

Solar shining light in renewables growth
A new report from the International Energy Agency has found that solar, wind and other renewable generation capacity increased to record levels in 2021, with 295GW of new capacity coming online.

The growth trajectory isn’t going to slow down either, with the IEA forecasting capacity additions of another 320GW in 2022, equivalent to meeting almost the entire electricity demand of Germany.

Growth this year has also been much faster than the IEA expected, thanks to strong policy support in China, the EU and Latin America, making up for slower-than-expected growth in the US – and it would have been speedier still if not for the supply chain challenges being experienced worldwide.

However, growth is set to plateau in 2023, as additions in solar are offset by a 40 percent drop in hydropower amid little growth in wind. Stronger policies will need to be implemented over the next six months to improve the outlook, the IEA stated – and a renewed focus on energy security in the wake of Russia’s invasion of Ukraine might achieve just that.

Grapevine

“Scott Morrison likes to say it wasn’t his job to stop the Port of Darwin being flogged to a company with ties to the Chinese Communist Party… But not only did he not stop it, he actually encouraged it”

Australian PM Scott Morrison comes under fire from Labor defence spokesperson Brendan O’Connor for his role in the controversial Port of Darwin sale in 2015.

Who’s hiring

Carlyle seizes Dey for energy unit
Two heads are seemingly better than one at The Carlyle Group as the DC-based firm has hired Avik Dey as co-head of its Carlyle International Energy Partners, which is set to become more integrated with its wider infrastructure platform.

Dey will join in the summer, having spent the past year as CFO at NOVA Chemicals. Prior to that, he was head of energy and resources from 2014 to 2021 at CPP Investments. Dey will lead CIEP alongside Bob Maguire, who has been a managing director of Carlyle’s international energy platform since 2014. CIEP will target global energy investment opportunities outside North America.

Marcel van Poecke, previously head of CIEP, will become vice-chair of the unit, which will be overseen by Macky Tall, who expands his role from chairing its infrastructure group.

Dey’s hiring comes after Carlyle earlier this month brought on Andrew Kapp as partner and managing director in the infrastructure division, following an eight-year spell as managing director at JPMorgan Asset Management.

Macquarie adds to transition team
Macquarie Asset Management has strengthened its environmental and energy transition team in London with the appointment of Gabriele Duesberg, who has joined as a managing director.

She will work on infrastructure investment and asset management activities across sectors such as transport electrification, waste management and biofuels, among others. She will also help with decarbonising MAM’s existing portfolio of utilities investments across the EMEA region.

Duesberg joins from JPMorgan, where she spent 16 years and most recently led the firm’s EMEA investment banking activities in power and utilities.

Gordon Parsons, a senior managing director at MAM, said in a statement that the firm hopes to harness Duesberg’s experience as “infrastructure will have a vital role to play as governments, industry, and consumers seek to reduce their carbon emissions and use our planet’s finite resources more efficiently”.

Deals

Making the Switch: IFM finally embraces data centres (Source: Getty)

IFM makes $11bn Switch to data centres
It might be a case of better late than never for IFM Investors, which has made its first data centre investment after agreeing a take-private deal alongside DigitalBridge of New York-listed Switch, in a deal worth $11 billion.

Switch designs, constructs and operates data centres, specialising in exascale and edge data centres. The deal’s value represents about a 32 times multiple on Switch’s expected 2022 EBITDA of $345 million to $357 million.

While a natural habitat for DigitalBridge, the move is IFM’s first in data centres and second in digital infrastructure following a German fibre deal in November, with its Global Infrastructure Fund’s main investments in toll roads, pipelines and airports.

It is also the second mega take-private data centre deal on the NYSE, following GIP and KKR’s $15 billion deal in November for CyrusOne. It seems like infra’s big guns can’t stay away from the party.


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