Whitehelm Capital has invested £45 million ($57 million; €51 million) into a junior loan issued by Kelda Finance, the first holding company for Yorkshire Water, the UK utility.
The firm, which is contributing nearly a third of the total £145 million loan, said the investment was made on behalf of third-party investors.
Whitehelm could not be reached to comment on the investors’ identity and the structure used to make the investment.
The deal allows Whitehelm to rejoin Yorkshire Water’s creditors book after a previous senior debt investment in the business was realised in April 2015. The utility is owned by Singapore’s GIC (33.56 percent), Corsair Capital (30.32 percent), Deutsche Asset Management Pan-European Infrastructure Fund (23.37 percent) and New South Wales’s State Super (12.75 percent).
“High-yield infrastructure debt continues to offer an excellent return compared with senior debt and big-ticket infrastructure equity,” noted Alexander Waller, the firm’s head of infrastructure debt.
The transaction follows Whitehelm’s £50 million investment in UK smart metering business Calvin Capital after it reportedly bought a £150 million, seven-year loan backing KKR’s acquisition of the business alongside SMBC, BNP Paribas and Mizuho last month.
The two deals bring Whitehelm’s investments in infrastructure debt to date to nearly £900 million, with an IRR of more than 10 percent, the firm said.
Whitehelm started off in Canberra but now describes itself as a “European infrastructure investment manager with an Australian heritage”. About half of its €3.4 billion assets under management are held in Europe and the UK.