One could be forgiven for thinking that now is not an auspicious time for a sustainability-focused GP to arrive on US shores. President-elect Donald Trump has pledged to “terminate” the green new deal, and “rescind all unspent funds” under the Inflation Reduction Act in a speech to the Economic Club of New York in September. Nevertheless, Infranity CEO Philippe Benaroya is confident that his firm’s prospects have not been dampened by the recent election result.
“The investment universe in the US is so large, even if there’s going to be changes with the Trump administration and so on. Still, these are massive numbers, massive capex,” he tells New Private Markets. “We are financing the transition. There will be businesses that will transition, that will decarbonise. Even if it represents fewer opportunities than what we have in Europe, it’s still large enough.”
Infranity, the €11 billion Parisian infrastructure manager that forms part of Generali Investments, is on a self-proclaimed mission to “unlock the asset class’s potential for positive impact”. The firm recently announced that it was expanding into North America, opening an office in New York. To staff it, a three-person team has been recruited from Fiera Private Debt: Paul Colatrella has joined as head of the US debt investment team, while Katherine McElroy and William Kim have arrived as managing director and director, respectively.
The firm has raised a significant amount of capital in recent years. It closed Generali Green Impact Investment Fund, and Generali Social & Digital Impact Investment Fund for a combined €2 billion in February. The firm is also seeking €3 billion for the Enhanced Return Debt Fund, which pursues opportunities in infrastructure sub-investment-grade debt. Half of the fund’s capital will be directed towards climate investments. It had received commitments totalling €1.59 billion as of September, some of which came from parent company Generali Group. It occupies the 28th position in our Impact 50.
“We are very sustainability driven. A lot of what we do is impact driven. I would say our direction of travel resonates very well. We are very well aligned with what our investors want to do. In the US it might be a bit different, but we will always be consistent with those ambitions,” says Benaroya.
Benaroya acknowledges that US investors as a whole are “less driven” by sustainability, but does not view that as a barrier to raising capital. When speaking to such investors, Benaroya tells them: “Maybe you don’t care. But don’t think that it is significantly diluting the spectrum of opportunities. Yes, we’re not doing oil and gas. If you want to do that, then you need to do that with another GP. But once you’ve said that, for the rest, it’s a massive universe.”
In the short term, Infranity will be looking to its existing contact book of equity investors in order to build its US business. “Most of it actually is going to be done with similar sponsors. We have quite a lot of equity holders that are active in Europe that are active also in North America, so there will be a very clear continuity,” says Benaroya.
Ultimately, Benaroya expects work in the region to eventually make up a sizeable proportion of Infranity’s business: “In a few years, maybe we invest 60 percent in Europe and 40 percent in North America. It is possible.
“We could have dedicated funds that would focus on US investments. That’s possible, it’s quite likely at some point. But the investment function, the selection, the process, is going to be the exactly the same to what we do here in Europe.”