Antin doubles down on North America
Antin Infrastructure Partners was the beneficiary last week of a €220 million commitment to the Antin Infrastructure Fund V fund from the New Mexico State Investment Council, a commitment notable for the fact that on its own, exceeds the amount raised by the vehicle during the entirety of Q1, when only €100 million was added to the coffers.
That aside, what was also notable about the Paris-listed manager’s latest flagship vehicle was the detail provided in the NMSIC meeting by Amy Ridge, partner at the LP’s investment consultant Mercer. Ridge said that Fund V would have an up to 40 percent allocation to investments in North America, double that of the previous vintage which catered for up to 20 percent of the vehicle to be deployed in the region.
Ridge cautioned that there was no guarantee of this threshold being met, with “investments having to compete against each other, no matter where they are”.
With 33 percent of the €10 billion targeted fund deployed at the end of Q1 predominantly in Europe, the land of opportunity will have to prove itself.
Yielco finds ESG in new FoF partnership
Yielco Investments is launching a global infrastructure fund of funds this summer alongside Metzler Asset Management. The fund is targeting €300 million and will be an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation.
The new fund will be invested in a portfolio of around 10 diversified primary and secondary funds, providing access to 150 underlying infrastructure investments.
It is Yielco’s fourth in a series of infrastructure FoFs, although its first in partnership with Metzler. Metzler will support the fund with regards to ESG and placement, Uwe Fleischauer, founding partner and member of the board of Yielco, told The Pipeline.
In a statement, Fleischauer added: “In the private capital market, global infrastructure offers attractive return opportunities and inflation protection in harmony with ESG criteria.”
Yielco’s third eponymous flagship launched in May 2021 chasing €400 million. It was in an early phase with seven commitments by August last year, according to a statement. Maybe more ESG is the spice that will bring investors to the table for the new fund.
ESG ‘too burdensome’
Stafford Capital Partners, which runs fund of funds programmes as well as other private markets strategies, is seeing “an increasing number of funds being developed that are evading Article 9 classification of the SFDR”, Jesse de Klerk, a partner in the firm’s private equity business, told PEI Group’s recent Impact Investor Global Summit in London, affiliate title New Private Markets reported.
Fund managers find the EU-imposed obligations for use of the Article 9 classification “just too burdensome from a reporting standpoint”, de Klerk added.
Such sentiment appears to be present in the infrastructure market. Anthos Fund & Asset Management has also been seeing this, said Diana Wesselius, Anthos’s managing director for multi-asset investing, joining de Klerk on a panel.
“Last year, we invested in an infrastructure fund that was investing in renewable energy transition in Africa… They were not labelling themselves an impact fund as such, although they were very impactful with investments. But they found the SFDR Article 9 was very scary and burdensome.”
Wesselius’s team worked with the infrastructure fund manager to complete sustainability reporting in line with Article 9 requirements on a voluntary basis “because we believed they could do it, and they are doing it”, Wesselius added.
One small push from Anthos, one greater leap for ESG.
Grapevine
“Renewable energy adoption in the energy-consuming sectors is stalling, despite a strong appetite for renewables, due to a lack of strategic integrated planning, inconsistent policies and a lack of structural reforms”
The latest report from think tank REN21 takes aim at policy leaders for the sector’s struggles
Who’s hiring
OMERS expands third-party capital team
OMERS Infrastructure has hired Francesca Collins as a director to further develop and the investor relations strategy of the Canadian pension’s Strategic Partnership Program, the platform that manages third-party capital.
“Given the success of the programme and the expanding strategic partner base, we are adding additional expertise to the team so as to continue to provide the level of client servicing and relationship management that we believe differentiates our platform from others,” a spokesman told The Pipeline.
OMERS Infrastructure currently has 18 partners in the programme with roughly C$6.6 billion ($4.8 billion; €4.5 billion) of capital invested in 11 assets in North America, Western Europe and Asia-Pacific.
OMERS declined to disclose the names of the programme’s strategic partners, other than to say they are “primarily consisting of pension funds and insurers”.
Collins, who joins from InfraRed Capital Partners, where she served as a product specialist in the firm’s capital formation group since 2016, will be based in London but will have a global remit, the spokesman said.
She will report to Irini Kalamakis, senior managing director and global head of Strategic Partnerships.
LP watch
Aussie investors climate response all heat, no action
Australian institutional investors are proving unresponsive to the physical risks of climate change despite the pressing need for action, according to a survey by the Investor Group on Climate Change.
As Australia prepares to launch its mandatory climate disclosure regime – which will affect entities including superannuation funds with more than A$5 billion ($3.3 billion; €3.1 billion) in funds under management – the IGCC is urging investors to mobilise more private capital toward resilience and become early adopters of climate goals.
However, only 16 percent of surveyed investors are conducting comprehensive physical risk analyses across their portfolios, and just 3 percent of those are implementing strategies based on their analyses – a worse result than two years ago.
Investors in real assets are relative bright spots in this gloomy picture, with 45 percent of infrastructure investors having undertaken physical risk assessments and 50 percent of those having implemented a response. Some 65 percent of real estate investors are undertaking assessments and 54 percent of those are implementing responses.
The bright spots are indeed, relative.
Deals
KKR wags its tail for Labrador transmission link
KKR has thrown its weight behind improving delivery of clean energy to North American grids, investing C$1.2 billion ($877 million; €809.7 million) for a minority interest in the Labrador Island Link, a 1,100km high-voltage transmission line connecting the 3GW Lower Churchill hydropower project in Labrador to Newfoundland and Nova Scotia in Canada.
The deal will see KKR buy the stake from Emera, which will receive C$957 million in cash proceeds from the deal, while a further C$235 million will be provided for assuming Emera’s obligation to fund the remaining initial capital investment.
While KKR is in market with both its flagship infrastructure and climate funds, as well as its open-end core fund, it would appear those vehicles aren’t present in this deal. Indeed, a KKR statement said that “KKR is making this investment through capital accounts advised by KKR”, although declined to provide further details on this.
Regardless, KKR said it will receive quarterly distribution payments over the remaining life of the 50-year Labrador Island Link contract. Certainly sounds like core infrastructure, at least.