First look
Blackstone adds $2.9bn to $50bn coffers
Blackstone has put the fundraising woes of 2023 behind it – at least when it comes to its open-end Blackstone Infrastructure Partners fund – after raising $2.9 billion for BIP in Q2 2024, it revealed in its earnings report last week.
That’s the largest amount of capital raised in a single quarter since it garnered $3.2 billion in Q4 2022, and dwarfs the $1.7 billion raised in Q1 2024. It means, according to Blackstone president Jon Gray, the BIP platform has now reached $50 billion, when taking the comingled fund, co-investment and fundraising in July into account. The BIP comingled fund now sits at $38.2 billion, receiving match funding of $20 billion by Saudi Arabia’s Public Investment Fund up to the $40 billion mark.
Performance has been “exceptional” too, according to Gray, with BIP demonstrating a 16 percent net IRR since inception. Gray revealed that Blackstone last week agreed to invest nearly $1 billion in a US wind, solar and transmission portfolio owned by NextEra Energy known as Nitro Renewables.
Adding to BIP is Blackstone’s infra secondaries unit, its green private credit funds and an equities stream. Blackstone has invested over $100 billion in the asset class, according to Gray.
Not bad going.
EQT planning towards €5bn for transition fund
EQT is stepping up preparations for the much-considered dedicated transition infrastructure strategy, the company confirmed during its 2024 half-year report.
While no target has been set yet, CEO Christian Sinding said this will “clearly be at the upper end” of the €1.5 billion-€5 billion range it sets for first-time funds. The strategy will invest in decarbonisation efforts across the energy and transportation space.
As for the flagship Infrastructure VI, this fund is expected to close no later than Q1 2025 at the targeted €20 billion, with €16.2 billion already raised, having reached €15.1 billion by the end of Q1. EQT has announced more than €5 billion of investments across data centres, renewables and cold chain logistics in H1 2024, although saw a deal for Italian telecom towers Wind Tre fall through.
Not resting on its laurels, EQT expects the next infra flagship to be activated in the first half of 2026. Still, fundraising timelines will continue to be extended in order for the fundraising market to further improve, according to the company, which may benefit the EQT Active Core Infrastructure Fund, launched in January 2022 with a target of €5 billion. EQT said last year this would close in H1 2024 – possibly below target – although no news as yet.
Certainly active, then, even if core is less so.
EU needs to ‘get real’ on green hydrogen
Everyone knows hydrogen is a highly flammable gas so no one should be surprised it’s led to a political flare-up in the Old Continent.
Last week, the European Court of Auditors released a report deeming the European Commission’s targets to produce up to 10 million tonnes of renewable hydrogen by 2030 and import a further 10 million tonnes as “unrealistic” and based on “political will” rather than “robust analysis”. It also noted a target to install 40GW of renewable hydrogen electrolysers by 2030 came from a hydrogen lobbying group.
“The EU’s industrial policy on renewable hydrogen needs a reality check,” said auditor Stef Blok, who led the report.
Currently, €18.8 billion in EU funding has been approved for green hydrogen projects between 2021-27. Advanced stage projects would add less than 5GW of production capacity by 2030, although there’s a 50GW pipeline being assessed.
So, is the commission ready to ‘get real’?
“The reality is that the commission has played a critical role in stimulating the development of the hydrogen market in Europe,” a spokesperson told Euronews, rejecting the Court’s suggestion to redraft its Hydrogen Strategy.
Seems like the hydrogen (gravy?) train rolls on.
Grapevine
“The opportunity we have in infrastructure is way beyond I’ve ever imagined even just seven months ago when we were contemplating the [GIP] transaction and formalising it”
BlackRock chief executive Larry Fink discusses the firm’s infrastructure journey in BlackRcok’s Q2 2024 earnings call.
Who’s hiring
Cummings and goings at Dexus
AustralianSuper’s global head of real assets Nik Kemp is moving over to real asset group Dexus in the new role of executive general manager of growth markets.
Kemp has been with Australia’s largest superannuation fund for more than 11 years, most of it as head of infrastructure.
His role at Dexus will involve enhancing its capabilities in infrastructure, healthcare and alternative investments.
The move comes amid a reshuffle following Dexus’s acquisition of AMP Capital’s real estate and domestic infrastructure business in March 2023.
Amid Kemp’s arrival, a spokesperson told The Pipeline that former co-head of infrastructure Michael Cummings has stepped away from Dexus.
Cummings joined Dexus from AMP Capital along with fellow co-head of infrastructure Michael Bessell, who now holds the title executive general manager of infrastructure and will report to Kemp.
Cummings will continue to serve on boards including Melbourne Airport and Endeavour Energy until the end of the year.
Danny, the champion of infrastructure finance
Danny Alexander, the British former politician who has worked for the Asian Infrastructure Investment Bank since 2016, is set to take up a new role as chief executive of HSBC Infrastructure Finance.
Announcing the move on LinkedIn, Alexander said HIF “will pursue a meaningful share of infrastructure financing and advisory opportunities associated with the transition to a low-carbon economy in strategic markets” and that, while the role is based in the UK, he expects to continue spending time in Asia.
Alexander joined the AIIB a month after it formally launched as its first vice-president and as corporate secretary, helping to shape its governance structures and corporate strategy. Prior to entering the finance world, he was a Liberal Democrat MP and served as chief secretary to the Treasury in the UK’s 2010-15 coalition government.
LP watch
Danish FSA finds fault with infra valuations
Danish pension funds have fallen foul of the local Financial Supervisory Authority which has complained about the way alternative assets are valued and demanded better processes to be put in place.
The valuations found wanting include infrastructure assets as well as other alternatives and the complaint involves PensionDanmark and Lærernes Pension. However, ATP and Lægernes Pension were among pension funds singled out for similar critique last year, so there really is no excuse for any Danish LP to still be lacking in this department.
The FSA’s inspection in March found that thresholds were too high when monitoring whether a value adjustment must take place, and the FSA was also unimpressed with the indices used for infrastructure and private equity valuations. Model input was found to be undocumented too.
Presumably, other Danish LPs will now get with the programme. Which leaves the question of what is happening in other jurisdictions… The Pipeline’s ear is open like a greedy shark to catch the tunings of a voice informed.
Deals
I Squared’s perfect TEN co-investment
A shot in the arm for the trailer leasing market at large, I Squared Capital has caught the eye of sovereign wealth giants Mubadala Investment Company and Qatar Investment Authority for a $600 million investment into its Transportation Equipment Network (TEN) business in North America.
The deal also drew interest from “other co-investors”, though I Squared was coy about naming them, only disclosing that they were both new and existing LPs.
I Squared acquired the business formerly called TIP Group in 2018.
Speaking with The Pipeline, Gautam Bhandari, chief investment officer and managing partner of I Squared, extolled the asset’s virtues: “Post-covid, the company has grown organically and quadrupled in size. Global Infrastructure Fund II was fully deployed, so we needed external partners to come in with the same vision.”
Bhandari added: “These are long-term, cash generative assets that tick all the boxes for core or core-plus infrastructure. Such companies are ideal for open-ended funds. I would consider a perpetual vehicle with like-minded, long-term investors but right now we need to integrate and grow TEN.”
Perhaps not the end of the story.
Today’s letter was prepared by Zak Bentley. Bruno Alves, Anne-Louise Stranne Petersen, Daniel Kemp, Tom Taylor and Nathalie Tidman also contributed.