Observable mis-pricing prompted Abebayo 'Bayo' Ogunlesi to sound a note of optimism when the Global Infrastructure Partners (GIP) boss discussed the asset class at Infrastructure Investor's Berlin Summit 2013.
In a wide-ranging interview with Philip Borel on Tuesday, Ogunlesi, chairman and managing partner of GIP, cited a staid interest rate and low leverage as ideal for investing private capital in infrastructure.
Meanwhile, although some participants saw a new asset-price bubble developing, Ogunlesi said it is “not as bad as the last one”.
“We don't separate opportunity and risk,” Ogunlesi, who co-founded GIP after the erstwhile investment banker left Credit Suisse Group, explained.
Despite not being risk averse, he pointed out GIP would not look to invest in emerging markets, such as Asia.
“GIP is focused on the developing world,” like Europe, North America and Australia, he said.
By the same token, GIP, based in London and New York, “is not likely to focus beyond” midstream energy, airport operation and management, and waste management.
Using its energy portfolio as an example, Ogunlesi talked up the “joint partnership” approach the fund manager used in developing the Ruby Pipeline and Chesapeake Midstream Partners, now called Access Midstream Partners.
GIP co-founded the former Chesapeake Midstream Partners with Chesapeake Energy.
Ogunlesi was quite open about GIP's troubled waste management holding, UK concern Biffa, and pointed out its biggest customer base – the construction sector and hotel and restaurant business – were hard hit in the global economic recession.
As GIP, manager to $15 billion, raised $8.25 billion for Global Infrastructure Partners II, the largest infrastructure fund ever, Ogunlesi revealed he ultimately had to urge the fund's institutional clientele to reduce their commitment size.