North America: Recent LP investors in JP Morgan infra fund revealed

19 September 2018 - 12:00 am UTC

A raft of new investors have backed the JP Morgan Infrastructure Investments Fund (IIF) over the past few months, Inframation can reveal. 

New commitments have come from the AA Ireland Pension Scheme, Sandooq Al Watan Investments – an Abu Dhabi-based initiative launched by Emirati businessmen to support research projects for the post-oil era, FBD Insurance Pension Scheme, the Barnabas Trust and Kempen Private Markets Fund, among others, public documents reveal.

In addition, the Ealing Pension Fund is performing due diligence on whether to invest 3% of its GBP 1.2bn of assets in the JP Morgan fund as part of a wider 5% allocation to the infrastructure asset class recommended by consultant Hymans Robertson.

The investors join more than 250 investors in the fund from over 20 countries, with the majority being from North America and more than three-quarters being pension schemes.

Notable U.S. pension schemes backing the fund include Chicago Teachers (USD 150m), Kansas Public Employees Retirement System (USD 150m) and Milwaukee County Employees’ Retirement System (USD 85m).

Investors are drawn to open-ended infrastructure funds as they typically have an existing portfolio of assets that generate yield immediately. In the case of IIF, investors have been impressed with the diversification of the underlying portfolio and the fast deployment rate of the fund.   

There are a variety of open-ended infrastructure funds in the market, some of the larger ones including the IFM Global Infrastructure Fund and Brookfield Super Core.

IIF was launched as an open-ended fund in July 2007 and aims to invest in the US and Canada (30-60%), western Europe (30-60%) and other OECD countries (0-20%). The focus is on core and core-plus assets, although there is scope to invest in riskier value-add assets.

According to an LP investor presentation seen by Inframation and dated 31 March 2018, IIF had a net asset value in the region of USD 9.44bn and a gross asset value of USD 21.1bn.

According to a fund-of funds invested in IIF, the current portfolio currently comprises:

Asset  Sector  Country
Southern Water Water  UK
SouthWest Water Company Water  U.S.
Beacon Rail Leasing Rolling Stock  Luxembourg
Electricity North West Energy Transmission UK
Summit Utilities Energy Transmission U.S.
Southwest Generation Energy Generation  U.S.
Novatus Energy Onshore Wind U.S.
Coastal Winds Onshore Wind U.S.
Noatum Ports Ports Spain
North Queensland Airports Airports  Australia 
Sonnedix Power Holdings Solar PV Global 
Pio Pico Energy Center Energy Generation  U.S.
Nieuport Aviation Airports  Canada
Koole Terminals Oil Storage  Europe 
Blackwater Midstream Energy Transmission U.S.
Naturgas Energía Energy Transmission Spain
Värmevärden Energy Transmission Sweden
Infinis Onshore Wind UK

The portfolio is allocated approximately one third to regulated assets, a third to contracted assets (mostly renewable energy) and a third to GDP-sensitive assets.

IIF’s most recent transactions include the sale of a 25% in SouthWest Water to MEAG and the acquisition of Marine Products Terminals from American Midstream in July.

To view the full strategy, list of LPs and investment details of IIF, click here

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