Former JLIF managers to float listed infra fund

16 November 2017 - 12:00 am UTC

Senior infrastructure managers have launched a new GBP 200m London-listed fund targeting the European and North American infrastructure markets.

Key drivers behind the Tri-Pillar Infrastructure Fund, which targets an 8-10% IRR, are Donald Trump’s greenfield infrastructure agenda as well as largely secondary opportunities in continental Europe.

The fund’s investment adviser, CAMG LLP, headed by Andrew Charlesworth (pictured), has identified a potential GBP 500m investment pipeline across North America and Europe. 

Charlesworth, who co-led the IPO of John Laing Infrastructure Fund in 2010, worked recently on Blueprint 2025, a bipartisan coalition of 100 industry CEOs and public sector representatives who identify and promote increased infrastructure investment in the United States.

CAMG, which plans to begin dealing the fund’s shares on 8 December, is already in second stage talks to buy a portfolio of majority and minority interests in more than 15 fully operational projects worth circa EUR 160m in continental Europe. 

The portfolio includes education, healthcare, public office, solar energy, road and communications projects, the manager said in a note to the London Stock Exchange launching the fund on Thursday (16 November).

The adviser is also in exclusive talks to invest equity and sub-ordinated debt into a recycling project in the south east of England. It plans to invest GBP 50m in the first phase of the project, which has a projected 15-20% IRR.

Tri-Pillar, which targets 2.25% dividend yield for its first year and 4.5% by 2020, may also target deals in Asia Pacific and can spend up to 15% of its gross asset value in other OECD countries, according to the statement.

CAMG’s CFO, Ian Ruddock, is a former strategic advisor to JLIF’s board, while its chief investment officer, Vikki Everett, previously provided investment and portfolio management services to JLIF. 

Norman Anderson, CEO of US PPP advisory firm CG/LA Infrastructure Inc, is the adviser’s chief business development officer.

The adviser forecasts secondary opportunities in continental Europe in the medium term, driven by strong pipelines in the Nordic countries, the Netherlands and Germany. 

It is also optimistic about the US, stating the “early indications are that there will be a significant increase in the opportunity for PPP” and for asset recycling. However, it added “development of the Trump administration’s infrastructure plan is awaited”. 

“With the limitation on government finances, either at state or federal level with the US Congress, it is likely that the United States will increasingly turn to outsourcing asset delivery and to PPP investment structures,” the adviser also said. 

It added: “The Investment Adviser believes that the opportunity in the short term will be in working with asset owners to develop concession opportunities from assets with infrastructure characteristics.”

CAMG is less optimistic about the UK, despite its GBP 502bn infrastructure pipeline across 700 projects.

“Significant and continuously occurring relevant deal flow in the UK arising from UK Government infrastructure investment plans in the immediate future appears limited,” the adviser said.

It is also uncertain about PPP secondary markets, stating “pricing for operational projects” has reached “multi-year highs”. 

However, it sees “near-term” secondary opportunities from maturing private infrastructure funds.

It is unlikely to bid via PPP auctions in the UK due to frothy prices paid for assets. But there may be “the possibility of making opportunistic acquisitions, in particular where the Investment Adviser holds relationships with the vendor”, it said.

Deloitte LLP is Tri-Pillar’s sponsor and financial adviser. Listing bookrunners are Peel Hunt LLP and Zeus Capital Limited.