Opportunity through adversity
“Now is the time to be investing in core,” Stonepeak senior managing director Rob Kupchak told a panel at the Infrastructure Investor Network’s Tokyo Forum last week.
He said while fundraising has been slow, managers have been more selective about where to put their capital.
Kupchak said investors have the chance to “pick up perpetual assets” at “double-digit returns” – unlike anything he has seen in the last 15 years.
“That’s where the capital should be flowing; that’s where the opportunity is.”
Vauban Infrastructure Partners deputy CEO Mounir Corm agreed, saying amid high interest rates, managers can reprice correlated core assets, leading to returns of higher than 10 percent.
However, he pointed out that not everyone will be able to capitalise on the current opportunity set: “There will be winners and losers.”
KKR co-head of European infrastructure Tara Davies said the difficult economic environment has tested the premise that infrastructure is protected against inflation – and the asset class “passed with flying colours”.
They say that pressure makes diamonds. Perhaps the setting stones are being laid.
Different tastes, greater appetites
When it comes to their alternative allocations, Korean LPs are skewing away from real estate amid high inflation – and infrastructure is picking up the slack.
At the Infrastructure Investor Network’s Seoul Forum last week, Korea Investment and Securities head of alternative investment management David Guhn-Chang Lee said his firm was previously weighted toward real estate, but with interest rates high, “we have been actively rebalancing” in favour of infrastructure.
However, not all infrastructure assets are created equal.
Hyundai Marine and Fire Insurance portfolio manager Kihyun Kim said while his company is not giving up on traditional assets like ports, verticals like digital infrastructure provide new possibilities.
While Kim cautioned against overshooting on trends, he said HMFI is interested in data centres, power generation and the commercialisation of hydrogen generation.
It’s a point of difference from KIS, which Lee said avoids taking risks on new technologies.
Instead, he said conventional assets – unaffected by macro changes and boasting a monopoly in the market – remain the cream of the crop.
AP Møller Capital nears $1bn target
AP Møller Capital’s second fund, the AP Møller Emerging Markets Infrastructure Fund II, has nearly reached its target of $1 billion a year after launch, but the emerging markets value-add strategy is not done with fundraising yet, CEO Kim Fejfer told The Pipeline.
“For Fund II, we are nearing $1 billion in committed capital, and we are working with a few investors [who may commit as well],” says Fejfer. Though some investors are DFIs such as the Asian Infrastructure Investment Bank and the International Finance Corporation, there is private capital in the mix too, according to the GP.
The GP’s inaugural strategy focused on Africa and closed at $1 billion in August 2018.
“We have made eight investments in our first fund and four investments in our second fund, diversified between transport and energy, different countries, greenfield and brownfield,” says Fejfer.
The GP is majority owned by shipping giant AP Møller Holding. “We have the benefit of being part of the AP Møller group with the synergies that entails and where the door is just slightly more open for us than it may be for many others,” Fejfer adds.
At this rate, that door is more than just ajar.
Grapevine
“We’re French, so we don’t invest in the UK”
Mounir Corm of Vauban Infrastructure Partners gives a disclaimer before wading into the conversation around the failings of Thames Water at the Infrastructure Investor Network’s Tokyo Forum
Who’s hiring
IFM zeroes in on North America
From one Australian infrastructure giant to another, Andrea Mody has ended a 17-year tenure at Macquarie Asset Management to become the new head of North America client solutions at IFM Investors.
The New York-based role will see Mody “oversee partnership development with North American clients while strengthening IFM’s client growth strategy throughout the region”, according to a statement from the group. She will report to the London-based John Gee-Grant, head of global client solutions.
Mody undertook a variety of roles during her time at Macquarie within the client solutions spectrum and liaising with LPs, starting at the group in 2007. She was most recently head of US wealth private markets and was the head of alternatives for MAM’s client solutions group for the Americas.
Wealth experience and a wealth of experience, it seems.
Deals
Ardian parcs up in Columbus
Ardian has made its first transportation investment in the US with the acquisition of CampusParc, the concessionaire that manages, operates and maintains the parking facilities at the Ohio State University’s campus in Columbus, Ohio.
The French manager, investing via its $2.1 billion Ardian Americas Infrastructure Fund V, bought the PPP asset from QIC, which is exiting the company as part of its move to focus more on investments in Australia and less on international transport assets.
QIC was awarded the PPP in 2012, which was signed with a 50-year agreement attached, paying $483 million for the concessionaire. The financial terms of Ardian’s acquisition have not been disclosed. CampusParc is the first and largest university parking concession in the US with over 38,000 total parking spaces.
It’s “an ideal fit within the broader strategy of our Americas fund”, according to a statement from Stefano Mion, co-head of infrastructure Americas at Ardian.
It’s also a welcome return to the fold for the once-popular car park subsector.