It’s infrastructure week – no, not that one, the real one. That’s right, starting today and lasting until 21 March, some 3,000 Infrastructure Investor Network members will congregate in the halls of the Berlin Hilton for the latest edition of our Global Summit.
As always, we’ve got a lot to talk about this year. Our editorial team is out in force at the Global Summit, so expect to receive a daily special edition of our Pipeline newsletter this week, with all our coverage.
In the meantime, enjoy the networking!
This time last year executives at Ontario Teachers’ Pension Plan were toasting the success of its infrastructure portfolio in facing off the challenges of inflation, scoring an 18.7 percent return for 2022. That tone has now shifted somewhat.
The Canadian pension giant revealed last week this had swung to a -2.8 percent return for the asset class in 2023, with the portfolio alongside real estate driving overall returns downwards. In a statement, OTPP said valuation adjustments due to “higher interest rates and asset-specific events that negatively impacted select investments”.
Infrastructure, comprising 16 percent of its total portfolio, had effective net investments at fair value in 2023 of C$39.2 billion ($28.9 billion; €26.6 billion), compared with C$39.8 billion in 2022.
OTPP did not expand on what the asset-specific events were, although The Pipeline understands this includes write-downs on certain assets.
So much so for stable cashflows, then.
Bernhard Capital Partners is nearing the $1.5 billion target for its BCP Fund III vehicle, sources have told The Pipeline.
The US-based manager launched the third iteration of its infrastructure services-focused fund in 2022 and has so far raised $1.4 billion, with a final close being eyed for the summer, the sources said. The strategy targets significantly higher returns than pure-play infrastructure funds, targeting a net 20 percent IRR and 2.5x multiple.
The fund has made four platform investments and nine acquisitions on top of that, including in the power plant services and infrastructure construction sectors.
On the more core infrastructure side, one source added that Bernhard is expected to be back in market this year with BCP Infrastructure Fund II, following the $530 million close of BCP Infrastructure Fund in November 2021.
Bernhard declined to comment on fundraising.
Sydney’s toll roads have received a scathing review and a roadmap to fix their issues. As Australia’s most tolled city, Sydney has 13 toll roads, of which ASX-listed company Transurban owns 11.
With no unified tolling system, some roads charge distance-based fees, others access fees and still others a combination of both.
In an interim report from the first major independent review of New South Wales toll roads, economist Allan Fels criticised their inefficiency, inequity, and lack of transparency.
Fels says the level of tolls is higher than necessary, discouraging efficient road usage, with costs steadily increasing under toll escalation provisions.
So, in comes the proposal unlikely to be favoured by private toll road operators, with Fels suggesting a state-owned entity established to set toll prices and improve competition.
However, with most tolls under long-term contracts, the road to reform may prove difficult.
Three years after adding infrastructure as its fifth line of business, Andera Partners, a French private equity firm investing in the small- and mid-cap space, has closed its first infrastructure fund above its €150 million-€200 million target.
“The fundraising of Andera Smart Infra 1 highlights the strong interest of investors (including the European Investment Fund under InvestEU) in green infrastructure, resulting from renewable energy and ecological transition requirements,” the Paris-based firm said.
The fund, which is classified as both an impact and an Article 9 fund under the EU’s SFDR, will invest in renewable energy production and storage, sustainable mobility and green data centres with average ticket sizes ranging between €5 million and €30 million.
Andera has already invested through the fund in seven assets in France and Spain. Another “five ongoing investments” brings the total capital deployed or committed of the smart fund to 51 percent, it said.
The infrastructure strategy is led by Guy Auger and Prune des Roches, who joined Andera in February 2021 from Zaist Capital Partners.
“Imagine if we told people that we are going to shut down all petrol stations today because we think electric cars will be the norm in 2050. People would rightly tell us that we were insane.”
Claire Coutinho, the UK’s energy security and net zero secretary, lays out the plan for a gradual energy transition
Former Vantage Infrastructure partner Oliver Schubert has re-emerged as a partner at Copenhagen Infrastructure Partners, he revealed in a LinkedIn post last week.
His appointment comes roughly a year after Schubert left Vantage Infrastructure, where he spent five years as senior partner and led the infrastructure equity investment team, after the firm decided to wind down its equity business and focus solely on infrastructure debt.
In his new role, Schubert “will focus on developing an adjacent strategy to CIP’s existing investment strategies supporting the energy transition”, according to his LinkedIn post.
He did not provide further details and CIP declined to comment other than to confirm his appointment. However, one source told The Pipeline, that the Danish firm will be launching a series of new initiatives later this year.
Stay tuned then.
Miami-headquartered I Squared Capital’s first foray into continental Europe will be an office in Munich led by newly hired Yves Meyer-Bülow, who will join as fund partner.
Meyer-Bülow leaves behind a position as managing director of infrastructure funds at Allianz Capital Partners after 16 years. He will report to senior partner Mohamed El Gazzar in London. Managing director Robert Sanow, who is responsible for sales coverage in continental Europe, will also be based in Munich.
The appointment follows a recent string of IR hirings and opening of offices in Sydney and São Paulo.
I Squared has an Energy Transition Fund targeting $2 billion in the market, and this is one GP that’s clearly embracing change.
Stonepeak has bought an 80 percent stake in four of Ørsted’s onshore wind sites for a total of $300 million. Two of the four sites are located in ERCOT, while the remaining two are in MISO (Illinois) and SPP (Kansas). The portfolio comprises 957MW of generation capacity and Orsted said in a statement it had raised $700 million of tax equity proceeds for the portfolio.
According to a statement from Stonepeak, all four onshore wind projects are operational and at least partially contracted with a PPA, some wholly contracted. Ørsted will retain operational control of the platform.
The Pipeline understands that the $300 million will come from Stonepeak’s renewables platform. It raised $2.75 billion for its Global renewables Fund in July 2021.
It’s the GP’s second major wind deal in a matter of weeks, with the firm agreeing to buy a 50 percent stake in Dominion’s 2.6GW Coastal Virginia Offshore Wind project for $3 billion last month.
US onshore wind, of course, is more of a success story to date.
