China Everbright Overseas Infrastructure Fund (COIF) recently reached final close at USD 450m after securing commitment from Korean insurer, ABL Life Insurance, as the final LP.
This is below the USD-denominated fund’s initial target of raising up to USD 1bn at its launch in 2016. The vehicle raised about USD 400m as of the end of last year. ABL Life is a South Korean life insurance company affiliated with Chinese insurance giant Anbang Group.
“We are happy to close at this amount,” China Everbright Limited CFO Richard Tang told Inframation yesterday (29 August) on the sidelines of a media briefing. The private equity firm is preparing to launch its second USD overseas infrastructure investment fund in the first half of 2020 in view of the global momentum, he added.
Everbright has not yet decided on the target size of the second fund, but will put a bigger focus on Southeast Asia and other Asian regions as compared to its predecessor that deployed capital in Europe.
“We like the return prospects (in emerging Asia),” Tang said. COIF’s 2016 acquisition of Albania’s Tirana International Airport from PSP Investments-owned AviAlliance, KfW and the Albanian-American Enterprise Fund has yielded decent returns for LPs and reflected its success in investing in less mature markets, Tsang noted.
The Hong Kong-based asset manager will look to tap insurers including those located in Hong Kong, among others, as potential LPs, Tang said. Despite the capital controls, some Chinese LPs could still make use of their Hong Kong accounts for capital commitment.
Sector wise, Tang highlighted telecom, such as data centres, as an asset class the second fund would be interested in.
In May, Zhao Wei, a long-time China Life veteran who previously oversaw China Re’s financing, took the reins at Everbright as the PE firm’s new CEO. The 48-year-old was appointed after his predecessor Chen Shuang resigned following nearly 12 years of service as the CEO.
Going forward, Everbright will look to target institutional investors such as big insurers, the social security fund and sovereign wealth funds in its fundraising as the company now strives to be a leading alternative asset manager, Zhao said.
Belt and Road regions will be major target markets for overseas investment, while domestically, Everbright, which has assets under management of more than HKD 145bn (USD 18.5bn), will focus on Greater Bay Area, Beijing-Tianjin-Hebei Economic Zone and the Yangtze River Economic Belt regions.
Chen continues to serve as an executive director and deputy general manager with the company’s parent China Everbright Group and will focus on preparing a Greater Bay Area fund under Everbright.
Everbright lowered its fundraise target as COIF’s existing LPs did not want to dilute their returns too much, former CEO Chen said in March.
COIF, which has a lifespan of eight years, targets global transport, telecom, renewables, water and waste and logistics assets, particularly in countries across Eurasia. It tends to make controlling stake purchases with a typical ticket size between USD 50m-USD 200m.
The fund reached first close in July 2017 with a USD 300m commitment by its parent company, while a second came three months later with a USD 100m commitment from China Life Insurance.