Japanese trading house Marubeni and Mizuho Bank said Friday (25 January) they have launched a new infrastructure equity fund for overseas investment, aiming to eventually bring the fund’s size to JPY 50bn (USD 456m).
Marubeni, Mizuho Bank and Mizuho’s Asset Management One (AM-One) unit, jointly set up MM Capital Partners in November 2018, which will manage the new fund known as MM Capital Infrastructure Fund 1 L.P.
The fund will provide institutional investors, both in domestic and overseas market, opportunities to invest in equity portion of brown field transport and energy infrastructure projects in OECD countries outside Japan, that can create a stable cash flow.
The fund is scheduled to reach a JPY 30bn first close by February 2019. The fund aims to achieve the size of JPY 50bn by the end of February 2020. Marubeni and Mizuho will seed the fund contributing up to JPY 10bn and up to JPY 5bn, respectively.
The new fund will begin with equity investment into Marubeni’s three infrastructure projects in Australia, two railway projects and one gas projects, said a spokesperson, without giving specific names of these projects.
Each of these projects have a size “between several tens of billions of yen and several hundreds of billions of yen,” said the spokesperson.
As these projects are already funded largely by project financing, Marubeni’s equity investment part is not so big, said the spokesperson without elaborating. Using proceeds from the sale of its equity portion in these projects, Marubeni will invest in high-margin infrastructure projects.
The spokesperson said it is possible to launch the second and the third funds for investment into infrastructure projects in emerging markets.