The world this month – December 2009

PTC India links up with Ashmore for maiden fund

PTC India, formerly known as the Power Trading Corporation of India, has selected UK-based emerging markets specialist Ashmore Investment Management as its joint venture partner for the formation of its maiden private equity fund. In May, the company raised INR5 billion ($107 million; €72 million) through the issue of approximately 66.7 million shares at INR75 per share. The capital raised then is being used to anchor the fund. The remainder of the capital will be raised from third party investors. The structure of the fund, its target and the joint venture agreement is currently under negotiation.

GIP lines up Gatwick Board

Global Infrastructure Partners (GIP), the $5.6 billion infrastructure fund, has made several appointments to the board of recently acquired London Gatwick Airport. The firm said Sir David Rowlands, a senior UK bureaucrat who until his retirement in 2007 ran the Department for Transport, will be chairman of Gatwick’s new board of directors. Rowlands is currently advising the UK government on plans to establish a high speed rail programme. Also joining the Gatwick board will be Andrew Jurenko, a former executive at Gatwick vendor BAA, and James van Hoften, former head of aviation at Bechtel.

Pennsylvania regulators OK SteelRiver gas deal

The firm’s $910m purchase of two natural gas distribution utilities, People’s Natural Gas Company in Pennsylvania and Hope Gas in West Virginia, from Richmond, Virginia-based energy company Dominion Resources is now one step closer to completion, though the West Virginia utility has delayed its decision on the deal. Both jurisdictions must approve the sale before the transaction, already 18 months in the works, can reach financial close.

Atlantia plots ‘foot in the door’ foreign expansion

Italian toll road operator Atlantia is “creating a basis for substantial international diversification”, chief executive officer Giovanni Castellucci said at a press conference in London in November. During 2009, Atalantia invested in projects in Chile, Brazil and India, amounting to more than 800 kilometres of toll road. Castellucci stressed that despite the firm’s international ventures, Italy was still its first priority.

Hastings seeks €1bn for third debt fund

Hastings Funds Management, an alternatives manager owned by Australia’s Westpac Banking Corporation, is launching an infrastructure debt fund to capitalise on the general decline of available credit. Sources said the fund would target around €1 billion in commitments. Hastings Infrastructure Debt Fund III (HIDFIII) will predominantly lend junior debt to infrastructure projects and businesses in sectors such as utilities, transport, telecommunications and social infrastructure.

Chicago mulls spending infrastructure deal reserves

Faced with a $550 million deficit for its 2010 budget, the City of Chicago is looking to cushion the blow by tapping into some of the money it saved from auctioning infrastructure assets over the years. Mayor Daley’s proposal to use up $370 million of money set aside from the city’s $1.16 billion parking meters deal would avoid deeper budget cuts and tax increases, but many lawmakers oppose using funds the city saved over the years by leasing out its assets.

Banks lend €114m to Platina for renewables

Private equity fund manager Platina Partners has secured €114 million in debt financing for two renewable energy projects in Europe. In Spain, NordLB and Banco Santander lent €70 million for Platina’s acquisition of Arico solar energy farm from Spanish utility Endesa, the firm said in a statement. In the UK, Platina secured £39 million (€44 million; $66 million) in debt financing from BNP Paribas Fortis and NIBC for the Pates Hill and Milton Keynes wind farms.

Brookfield completes ‘transformational’ Babcock deal

Toronto-based Brookfield Asset Management has completed an A$1.8 billion (€1.1 billion; $1.6 billion) recapitalisation of Babcock & Brown Infrastructure. The deal gives Brookfield interests in eight new infrastructure assets worldwide. Babcock & Brown Infrastructure will operate under the name ‘Prime Infrastructure’ and will only be 68 percent leveraged, as opposed to the pre-transaction level of 98 percent. Brookfield, which invested $1.1 billion in the transaction, owns 40 percent of Prime Infrastructure.

Macquarie eyes $1.1bn for Mexican infrastructure fund

Macquarie is targeting 15 billion pesos ($1.1 billion; €750 million) for a Mexican infrastructure fund, the first peso-denominated fund focused solely on infrastructure opportunities in Mexico, according to a source. The Macquarie Mexican Infrastructure Fund expects to reach a first close by the end of the year, the person added. It will be seeking capital from Mexican institutional as well as international investors.

NY Common carves out space for infrastructure

The $126 billion New York State Common Retirement Fund has for the first time carved out a niche in its massive portfolio for investments in infrastructure, real assets like timber and gold, and commitments to the US government’s bad bank programme, called the Public-Private Investment Programme. The allocation for infrastructure and other strategies will take up to 5 percent of the overall portfolio and sit within the alternatives allocation, which has a range of up to 25 percent and has a current allocation of 20 percent.

CIC invests HK$5.5bn in Chinese energy company

China Investment Corporation (CIC) has agreed to invest HK$5.5 billion ($710 million; €476 million) for a stake of approximately 20 percent in GCL-Poly, a Hong Kong-listed renewable energy company. The Chinese sovereign wealth fund will buy 3.1 billion GCL-Poly shares priced at HK$1.79 each. The company will use the capital for working capital, to pay down debt and to form a joint venture with CIC, which will be capitalised with HK$500 million, to invest in and develop solar energy projects.

Indonesia to offer $4.5bn of projects to private sector in 2010

Indonesia’s National Planning Bureau aims to offer up to eight infrastructure projects to private sector investment next year. The eight projects span the country’s toll road, sea transportation, railway, water, electricity and power sectors, and are estimated to cost $4.5 billion, Wahyu Utomo, Indonesia’s assistant deputy minister for infrastructure and regional development told the audience at PEI Media’s November Infrastructure Investor Forum in Singapore (see p.12) .

Electra spin-out launches environmental infrastructure fund

Acuity Capital Management, the London-based smaller companies specialist, is launching a fund to invest in environmental infrastructure projects focusing on organic waste recycling in the UK. The Acuity Environmental Infrastructure Fund aims to raise an initial £100 million (€112 million; $167 million) of equity to invest in 8-12 sites, with each site backed by at least a 10-year contract with a local authority or a company establishing a fixed volume of waste at a set price, said the firm in a statement.

CPG Partners, Tianjin to raise $500m infrastructure fund

Singapore-headquartered CPG Capital Partners has teamed up with China’s Tianjin government to set up the CPG Tianjin Infrastructure Fund, which aims to raise $500 million by February 2010. CPG and the Tianjin government will each commit $50 million to the private equity fund while other domestic investors will commit between 10 percent and 20 percent of the targeted fund size. The fund will focus on acquiring toll roads in Tianjin and Tangshan, a city to the east of Tianjin, in addition to developing one greenfield infrastructure project.

Probitas: $110bn of infrastructure funds coming to market

There are more investment managers seeking more money for infrastructure than ever before, but investors are committing less money to the asset class, according to the newest survey of institutional investors published by placement agent Probitas Partners. The firm’s latest round-up lists 99 funds seeking a total of $110 billion; up from 63 funds seeking $94 billion at around the same time last year. But only $6.3 billion was raised for infrastructure through the first nine months of this year, compared to $21.5 billion in the same period last year, according to Probitas.

Invicta Capital launches £300m biomass fund

Invicta Capital has launched a new fund focusing on biomass-combined heat and power investments. The Invicta Biomass Fund is targeting £300 million (€335 million; $502 million) of commitments from institutional investors to invest in the construction and operation of biomass plant projects in Scotland. The fund has an identified portfolio of nine medium-sized plants in the country with a combined generating capacity of 90 megawatts.

Ex-GE execs launch clean energy private equity firm

A group of former General Electric executives headed by Lou Schick, a former senior scientist at GE’s global research division, have founded New World Capital “to profit in transitioning to a clean economy”, according to a statement. The private equity firm will invest in middle-market companies and related infrastructure projects in the clean energy, energy efficiency, environmental services, waste management, water and sustainable and biodegradable materials fields. It will focus on the US but also consider opportunities in Europe, where it has partnered with Ambienta Sgr, a private equity firm focused on environmental assets.

TenneT powers into €1.1bn German grid acquisition

Energy network operator TenneT has agreed to acquire the electricity transmission grid of German power company E.ON for around €1.1 billion ($1.7 billion). The Dutch state-owned company is set to acquire Transpower Stromübertragungs GmbH (Transpower), the subsidiary which operates E.ON’s high-voltage transmission network, on December 31. The companies have agreed a price of €1.1 billion for the transaction, which comprises a valuation of the business at €885 million, plus the company’s cash holdings.

Jordan Dubai Capital, Kazayna Capital to set up PE and infra funds

Jordan Dubai Energy & Infrastructure (JDE&I) and Kazayna Capital Management have signed an agreement to jointly set up and invest in private equity and infrastructure funds. The two firms will also develop investment and infrastructure projects in Jordan and Kazakhstan, according to a Jordan Dubai Capital statement. The targeted sectors include the power, water and transportation logistics sectors, Samir Al-Rifa’i, JDE&I’s chairman, said in the statement.