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The Pipeline: Swiss Life’s €2.2bn close, new ground for Stonepeak, GIP’s offshore wind expansion

Swiss Life’s €2.2bn close, Arcus founding partner joins QIC and Stonepeak breaks new ground. Welcome to The Pipeline, the start-the-week briefing for our valued subscribers only.

First look

Sky high: Swiss Life beats target by €600m (Source: Getty)

Swiss Life’s €2.2bn final close for third infra fund Swiss Life Asset Managers has reached a €2.2 billion final close on its latest infrastructure fund. The oversubscribed close saw Swiss Life surpass the vehicle’s original €1.6 billion target by more than 27 percent, an increasingly common occurrence in the market.

The third vehicle – which reached an €825 million first close in December 2019 – will follow its predecessors’ core investment strategy, with an eye to “the renewables space in particular”, and has invested in four assets, Swiss Life said in a statement, without providing details. Swiss Life Funds Global Infrastructure Opportunities III is targeting net returns of 6-8 percent, a spokesperson previously told us. The 25-year vehicle is looking at investments in Europe and North America across regulated assets, energy, transport and telecoms.

GIO III follows the July 2018 closing of its predecessor on €1.2 billion, above its €1 billion target. It has tended to take minority stakes in assets, with investments including Brussels Airport, a motorway in Poland and French oil storage company Pisto.

KKR hones in on Asian renewables
KKR has launched a renewables investment platform focusing on solar, wind and energy storage projects in Taiwan and Vietnam.

The platform, known as Aster Renewable Energy, is expected to expand to other Asian markets in due course and has one project – a commercial solar PV project in Taiwan – already in operation. Headquartered in Singapore, the new platform follows the firm’s launch of Virescent Infrastructure, an India-focused renewable energy platform established in 2020.

In a statement, head of KKR’s Asia Pacific infrastructure team Michael de Guzman said the launch of Aster reflected the firm’s confidence in the region’s renewables sector, noting Asia had reached an “inflection point” where “favourable geographical characteristics and resources, supportive government policies, and demand for sustainable energy solutions to meet the region’s growing needs” had converged.

The new platform is led by chief executive Chen Wei who previously ran I Squared-owned development platform Asia Cube Energy.

Quadoro, aream launch ‘pure impact fund’
A fund investing in renewables is quite common today, but in the case of the Quadoro Sustainable Energy Fund, it is a first of sorts for Germany. The open-ended fund is “a pure impact fund for renewables”, Markus Voigt, chief executive of aream Group, told The Pipeline.

Düsseldorf-based aream is an asset manager focused on sustainable infrastructure that has partnered with alternative investment fund manager Quadoro to raise an initial €300 million.

Both partners will be responsible for fundraising, while aream will also be responsible for the sourcing and management of the assets, Voigt said. A third partner, Encavis, “will be complementary on the asset management side to aream,” he added.

Asked why QSE is being launched as an impact fund – it complies with SFDR’s Article 9 – Voigt responded: “With renewable energy investment, we have a strong sustainability focus per se and meet the strict standards of the [EU] taxonomy.” As for returns, Voigt added: “If anything, [impact status] makes the investments more resilient.”

QSE will have an investment horizon of at least 12 to 15 years and will invest in clean energy projects, including generation, transport and storage, in the European economic area.

Grapevine

“A 20 percent fraction only represents about 7 percent in energy terms which means blending could achieve, at best, only 7 percent CO2 emissions reduction.”

new report from the International Renewable Energy Agency pours cold water on the idea of blending hydrogen into existing gas grids.

Who’s hiring

Arcus transport chief on the move 
Australian fund manager QIC has made an addition to its investment team, with Nicola Palmer joining as a partner in the transport sector, based in the firm’s Sydney office.

Palmer was most recently a founding partner at Arcus Infrastructure Partners in London for 13 years, where she was co-head of the firm’s transport sector team, sitting on the boards of Gdansk Transport Company and A1 motorway in Poland. She was also head of fundraising from 2012 to 2015. She worked for several years prior to that in the senior executive team at Babcock & Brown in Australia.

She reports to QIC’s global head of infrastructure Ross Israel, having started in the role in April.

Infrastructure Investor revealed last week that QIC is about to return to market to raise its second Global Infrastructure Fund. It will likely target $3 billion to $5 billion, but unlike its predecessor this one may be USD-denominated.

LP watch

LPs bulk up in numbers and allocations eVestment, a Nasdaq company, reported that Q1 2022 saw predominantly US-based public pension plans dedicate $4.5 billion in capital towards infra funds — up 12.5 percent from Q1 2021. The number of pensions investing in the asset class also rose 19 percent since Q1 2021.

The company — reporting mainly on US investment trends — chalks up the boon to infra to a growing emphasis on ESG investing (with infrastructure replacing oil and gas in real asset portfolios), as well as a hedge against that clear and present danger of inflation.

eVestment also says the increase is down to a growing consensus among private markets consultants that the infrastructure space is the place to be. Meketa, for example, is urging infrastructure allocations of 3-7 percent, AndCo Consulting recommends LPs allocate 5-10 percent, while “megatrends representing areas of new growth” are driving recommendations for NEPC.

What’s going to stop the infra juggernaut?

Deals

Back to school: Stonepeak begins learning curve with first education deal (Source: Getty)

Back to school for Stonepeak 
Stonepeak has added a new string to its bow with its first education investment, injecting €1 billion from its flagship series for a minority stake in Inspired Education Group.

The company, formed in 2013, operates 71 private schools, with about 40 percent in Europe and about 25 percent in South Africa, Stonepeak’s senior managing director James Wyper told The Pipeline. The remainder are based across the rest of the world.

“Although we haven’t invested in education before as Stonepeak, we’ve spent time building out a thesis over the last 36 months,” Wyper said, adding that Inspired is pretty unique within the sector.

“We’ve looked at all of [the similar opportunities] and that’s pretty easy to do because there’s not many of them in terms of scale and quality. It’s a nice sector, but you also only get your one shot,” he said.

Certainly a learning curve for Stonepeak, then.

GIP’s ‘highly scalable’ offshore wind buy 
It was quite a week last week for Global Infrastructure Partners, which began with its mammoth renewable energy tie-up with AGL Energy in Australia and finished with its acquisition of the offshore wind business of German developer wpd.

GIP, which has already made a splash in offshore wind markets in the UK, Europe and more recently in the US, will span its wings a little further, with wpd’s presence in 14 European and APAC markets. A jack of all trades, wpd offshore does greenfield development, engineering and design, procurement, financing and construction, according to a statement.

Adebayo Ogunlesi, chairman and managing partner of GIP, added that wpd offshore is a “highly scalable platform” and with a pipeline of over 30GW in various stages of development, it seems toes are only just being dipped in the water.


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