EMEA: JP Morgan infra grows LP commitments as its NAV soars

12 October 2018 - 12:00 am UTC

JP Morgan Asset Management (JPMAM) is understood to have signed-up three new European investors to its global infrastructure fund, as the net asset value of the fund’s investments exceeds EUR 8bn.

The New-York headquartered asset manager, which has been fundraising for its open-ended fund since 2007, is understood to have raised commitments for its JP Morgan Infrastructure Investments Fund (IIF) from two investment schemes run by the Swiss Hotel Association, Le Fonds de prévoyance pour le personnel de la Société Suisse des hôteliers and Hotela Fonds de Prevoyance. It has also raised commitments from Stichting Rovazan-managed Z Capital CV.

The commitments are the latest in an inflow of capital to the fund in recent years which has seen its net asset value climb from USD 6.05bn (EUR 5.6bn) in March 2017 to USD 9.7bn (EUR 8.3bn) in June 2018. In June 2013 the fund’s NAV stood at USD 3bn (EUR 2.3bn). The total size of its commitments is not known as the manager fundraises continuously.

JP Morgan Asset Management declined to comment.

The investors join more than 260 LP investors in the fund from over 20 countries. It is understood that over 40% of committed capital has come from North American LPs, with pension funds providing approximately 60% of the fund’s capital.

Notable US pension schemes include Chicago Teachers (USD 150m), Kansas Public Employees Retirement System (USD 150m) and Milwaukee County Employees’ Retirement System (USD 85m).

It emerged earlier this week that the North Dakota State Investment Board (NDSIB) is likely to partially redeem its commitment to the fund due to concerns that its portfolio’s exposure to IIF is over concentrated. In May, the UK local government pension scheme of Strathclyde committed to invest GBP 500m in the fund.

Launched in 2007, the open-ended fund targets investments in mid-market operational infrastructure assets with a focus on long-term contracted and regulated cash flows.

In the manager’s marketing materials it refers to a preference for assets which offer “diversification, inflation protection and yield.” The fund, which primarily invests in North America, Western Europe, Australia, but has a mandate to invest in other OECD counties, targets a net IRR of 8-12%, returning an annual cash yield of 5-7% on NAV.

IIF had generated a 10-year net total USD return of 1.5% to June 2018, according to a documents seen by Inframation

JPAM charge management fees of 0.8% to 1% on drawn capital, with a performance fee of 15% over a 7% hurdle. The performance fee is capped at 13.5%.

The infrastructure team is led by managing directors Paul Ryan, Matthew LeBlanc, Brian Goodwin, Landy Gilbert, Andrew Kapp and Hai-Gi Li in New York and John Lynch, Rob Hardy and Mark Walters in London.

The team has seen a significant amount of churn in recent years with at least two rival infrastructure businesses being set up by former JPAM employees.

These include in North America the formation of Argo Infrastructure Partners in 2015 by former CIO of IIF Jason Zibarras who was joined from JPAM in May by Kenneth Bonn.

While in London, former IIF global head of asset management Surindeer Toor formed Arjun Infrastructure Partners in 2015 alongside François Bornens. They have been joined in the last few months by former colleagues Peter Antolik, Serkan Bahceci and Euguene Ide, who all held positions at JPAM.

Andrew Truscott last year stepped down as IIF’s European head to join Citigroup’s M&A infrastructure advisory team.

JP Morgan Infrastructure Investments Fund (IIF) Portfolio

Asset

Sub-Sector

Country

Date of Investment

Equity Holding

Odfjell Terminals Rotterdam (OTR)

Oil and gas storage

Netherlands

Sep-18

51%

Marine Products Terminals  (Blackwater Midstream)

Ports

USA

Jul-18

100%

Naturgas Energia (Nortegas EnergIa DistribuciOn)

Energy transmission

Spain

Aug-17

 

Mesquite Power 625MW CCPP

Energy Generation

USA

Jul-17

 

(Ventient) Infinis 409MW Wind Farm Portfolio

Onshore wind

United Kingdom

May-17

100%

Beacon Rail

Rolling stock

Luxembourg

Apr-17

100%

Varmevarden

Energy transmission

Sweden

Mar-17

100%

Pio Pico 323MW Energy Center

Energy Generation

USA

Feb-17

 

Sonnedix Group

Solar PV

Europe, LatAm, Asia

Aug-16

100%

Sunflower Wind

Onshore wind

USA

Jul-16

 

Koole Terminals

Oil and gas storage

Netherlands

Nov-15

60%

Billy Bishop Airport Terminal

Airports

Canada

Jan-15

 

Goya Noatum Valencia Port PPP

Ports

Spain

Dec-10

32.68%

SouthWest Water Company

Water

USA

Sep-10

75%

North Queensland Airports

Airports

Australia

Jan-09

66%

Coastal Winds 350MW Wind Portfolio

Onshore wind

USA

Jan-09

37%

Southwest Generation Acquisition

Energy generation

USA

Apr-08

100%

Electricity North West Limited (ENWL)

Energy transmission

United Kingdom

Dec-07

50%

Southern Water

Water

United Kingdom

Oct-07

29.30%

(Ventient) Zephyr Investments Ltd

Onshore wind

United Kingdom

Jun-07

66.66%

Summit Utilities

Energy transmission

USA

May-07

100%

Source: Inframation

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