The Pipeline: Check out our new database, offshore wind’s lucrative loophole, UBS hires infra equity chief

Infrastructure Investor gets a new-look database, UK offshore wind owners find CfD loophole and a CPPIB MD departs to head equity at UBS. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

II’s new-look database: Faster, easier to use and with more features

Calling all database users!Infrastructure Investor subscribers might have noticed something different about our database last week. That’s because we’ve given it a shiny new upgrade to make the database easier to use and more informative than ever before. Besides a more user-friendly and speedier interface, new features include law firm profiles and pages designed specifically for service providers such as placement agents and investment consultants. If you haven’t already checked it out, give the new-look database a try here.

When visiting the database, we would ask you to make sure your profile data is up to date and, if not, please connect with our research team (researchandanalytics@peimedia.com) – many thanks.

Swiss Life gives credit to third parties
Having raised €1.5 billion from the Swiss Life Group and deployed nearly half that amount already, the insurer’s asset management arm is opening up its maiden infrastructure debt fund to third-party capital. The goal is to raise an additional €1 billion to meet its target size.

The Swiss Life Loan ESG Infrastructure Debt fund has already deployed €700 million in roughly 20 investments in nine European countries. Assets comprising the fund’s portfolio include telecoms, transportation, social infrastructure, wind and solar farms, as well as industrial storage for hydrogen, biogas, oil and natural gas, Stéphane Rainard, the head of infrastructure debt at Swiss Life Asset Managers, told The Pipeline.

An Article 8 fund under the EU’s SFDR, it follows a buy-and-hold approach, “holding assets until full repayment”, and targets both greenfield and brownfield opportunities, the Swiss manager said in a statement.

“Investor interest is bolstered by the fact that the fund is operational and already largely invested,” it added.

Offshore wind farms leave CfDs blowing in the wind
The UK’s Contracts for Difference scheme has generally been a hit with the private sector. These days, though, CfDs are hitting offshore wind farm operators where it hurts most: their wallets.

According to consultancy Cornwall Insight, wind farm operators have “a significant commercial incentive” for delaying their CfD contracts, given soaring wholesale power prices. For example, if you were awarded your CfD during 2017’s Allocation Round 2, you would have got strike prices set at £73.71/MWh and £94.81/MWh (both prices in current money).

The trouble is, the Intermittent Market Reference Price, which determines CfD payments, has averaged £187.42/MWh since the start of 2022 up to 14 May. That means operators activating CfDs this year would have to pay back government the not-inconsiderable difference between their agreed strike prices and the IMRP.

Postponing CfD activation was originally designed for potential project delays, but it “also allows for conscious delays from developers”, noted Lee Drummee, analyst at Cornwall Insight. “The Department for Business, Energy and Industrial Strategy has urged companies to play fairly, especially in these trying times for consumers.”

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Vinci Partners scores BNDES anchor commitments
Brazil’s national development bank, BNDES, selected Vinci Partners, the domestic alternatives manager, last week as the recipient of 1 billion reais ($197.8 million; €188 million) in seed commitments. The capital will make its way into two of Vinci Partners’ funds, with 500 million reais allocated to Vinci’s Climate Change FIP Multiestratégia fund and 500 million reais in credit strategy Fundo Vinci FI-Infra RF.

The two funds are new vintages within the infrastructure equity and credit segments. VICC, Latin America’s first pure play climate infrastructure fund, will invest in renewables, water and sewage, as well as green technologies. Vinci Credit Infra will focus on similar sectors, investing in incentivised infrastructure debentures and focusing on high-grade credit assets.

The commitments in part culminate a search launched by BNDES earlier this year to invest 2.5 billion reais in three infrastructure equity funds and two debt funds, targeting sustainable infrastructure.

Grapevine

“A data centre is not a real estate investment. Real estate investors do not understand the industry”

Triple Point’s Thor Johnsen doesn’t leave much room for debate in our latest digital infrastructure special report

Who’s hiring

UBS nabs CPPIB MD for equity chief
UBS Asset Management has brought in Andrew Morris from Canada Pension Plan Investment Board in the newly created role of head of infrastructure equity, as it bids to boost its fortunes globally.

Morris joins following a five-year tenure as a managing director at CPPIB, where he worked on the origination and management of deals in the European transport, utility and telecoms sectors. That will move to a global remit with UBS’s international equity business, which spans Europe, North America and Australia, with a focus on “exciting sustainable themes while taking advantage of long-term trends”, according to a statement from Tommaso Albanese, UBS AM’s head of infrastructure, to whom Morris will report.

UBS remains in market with its 2019-vintage Archmore International Infrastructure Fund III, which has a target of $1 billion.

Deals

All aboard: Globalvia and Kinetic keen on Go-Ahead’s 6,000 strong fleet (Source: Getty)

Go-Ahead given in latest UK transport deal
Globalvia, the Spanish transport company owned by pension trio OPTrustPGGM and USS, has teamed up with Australian bus operator Kinetic, itself bought by Infrastructure Capital Group last year, to make an offer for UK transport group Go-Ahead, in a deal worth £647.7 million ($798.7 million; €758.6 million).

The offer, recommended by the board, is a 14.8x multiple on Go-Ahead’s 2021 earnings, excluding a special dividend. Go-Ahead operates a fleet of 6,000 buses across England, including one-quarter of the bus fleet in London. It also operates rail franchises in London, Germany and Norway.

The recommended offer comes after FirstGroup, another UK transport group, last week knocked back an approach from I Squared Capital worth £1.2 billion.

Go-Ahead was stripped of one contract in the UK this year and fined £23.5 million after being found guilty of an “appalling breach of trust” in its handling of the UK southeastern network in March, according to the Department of Transport.

More work to do, then.

Repsol’s black to green ‘validation’
Decarbonisation continues to be a dominant thematic for infrastructure dealmakers, evidenced by energy giant Repsol’s partnership with two investors to help accelerate its transition to net-zero emissions.

French insurance company Crédit Agricole Assurances and Switzerland-based Energy Infrastructure Partners have agreed to acquire 25 percent of Repsol Renovables, the firm’s renewables business, for €905 million. The deal is expected to close by the end of 2022.

Repsol Renovables has more than 1.6GW of installed capacity in both wind and solar across Spain, the US, Chile and Portugal, with a goal to reach 6GW by 2025. It said in a statement that the EIP tie-up will enable it to enter new markets and technologies, such as offshore wind.

Repsol CEO Josu Jon Imaz said the investment represented a “validation” of the Spanish oil major’s renewable energy development strategy.


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