Tuesday, July 23, 2024

Infrastructure Investor Awards 2023: Global

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Personality of the Year

Winner: Gautam Bhandari, I Squared Capital

Second place: Sam Pollock, Brookfield Infrastructure Partners
Third place: Lucy Heintz, Actis

A co-founder and managing partner of I Squared Capital, Gautam Bhandari became the firm’s first official global chief investment officer last May. During the firm’s 11-year existence, Bhandari has pioneered I Squared Capital’s mid-market approach through platform investing, novel at the time, and then dedicated himself to building out investment and asset management teams across the US, Europe and Asia. Over the years, Bhandari also oversaw the firm’s strategy expansion with the launch of the ISQ Global InfraTech Fund, the ISQ Global Infrastructure Credit Fund and the ISQ Growth Markets Infrastructure Fund. He also led the launch of the firm’s inaugural energy transition fund. Over the past year, he oversaw the over $4.9 billion in deals across North America, Europe and Asia as well as over $2.8 billion in realisations.

Fund Manager of the Year

Winner: I Squared Capital

Second place: Brookfield Asset Management
Third place: Macquarie Asset Management

I Squared Capital has excelled in a challenging fundraising market, closing a growth markets fund on $1.8 billion despite heightened risk aversion among investors. The firm also closed a debut credit fund on $750 million and an infratech fund on $150 million. Meanwhile, I Squared remained active on the deal front, with deals including the Whistler Pipeline, the HEXA Renewables’ Malaysian greenfield initiative and the Bombay listing of Cube Highways. Furthermore, the firm shows no signs of stopping when it comes to pushing its boundaries. In late 2023, I Squared set up its first office in Brazil, and has already closed its maiden deal in the region, investing up to $400 million for a 49 percent stake in Órigo Energia.

Institutional Investor of the Year

Winner: GIC

Second place: CDPQ
Third place: Investment Management Corporation of Ontario

In 2023, Singapore’s sovereign wealth fund GIC posted its highest returns since 2015, stating that it planned to double down on infrastructure opportunities amid a challenging economic environment. GIC has already increased the size of its infrastructure portfolio by five times since 2016, with an annual deployment pace of $10 billion-$20 billion a year. It has also been bold in pursuing some of the newest investment opportunities in the energy transition including hydrogen, where it backed InterContinental Energy alongside Hy24. Other recent deals include the acquisition of a majority stake in an Indian smart metering platform and a portfolio of Brazilian power transmission assets.

Equity Fundraising of the Year

Winner: Brookfield Asset Management

Second place: I Squared Capital
Third place: Goldman Sachs Asset Management

With a final close on $28 billion for its fifth flagship fund, which ended up being oversubscribed, the winner in this category could be no other than Brookfield Asset Management. Brookfield Infrastructure Fund V is not only the largest closed-end vehicle ever raised it’s also the Canadian firm’s largest across all the asset classes in which it invests. Some 200 LPs contributed to the fund, exceeding its initial $25 billion target, and by the time it had reached final close at the end of November, 40 percent of the capital had already been deployed across six investments in renewables, transport, data centres and telecom towers.

Debt Fundraising of the Year

Winner: Brookfield Asset Management

Second place: Blackstone
Third place: Ares Management

Brookfield Asset Management closed the third iteration of its global infrastructure debt programme on more than $6 billion, including roughly $400 million in co-investment capital, in October 2023. The new vintage is more than twice the size of its $2.7 billion predecessor, making it the world’s largest private infrastructure debt fund. Over 60 percent of investors are new to Brookfield’s infrastructure debt platform. The fund, to which Brookfield committed $600 million of its own capital, is already 60 percent invested or committed across 11 investments, one of which is Louisiana-based PosiGen, a residential solar and energy efficiency provider for low-to-moderate income homeowners.

Deal of the Year

Winner: Intel (Brookfield Asset Management)

Second place: CWP Renewables (Buyer: Squadron Energy. Seller: Partners Group)
Third place: Atlantia (Blackstone, Edizione Holding, Fondazione CRT)

Brookfield closed on an innovative joint venture with Intel to construct a $30 billion semiconductor fabrication facility in Arizona, with Brookfield investing up to $15 billion for a 49 percent stake in the expansion. The deal is a first of its kind agreement which will see Brookfield help corporate giants such as Intel onshore part of the digital backbone of the global economy. It comes in the wake of US President Biden’s Chips Act, which includes $52 billion of incentives for the semiconductor industry. Crucially, the transaction insulates Brookfield from any development costs, with a guaranteed payment agreed with Intel for the entirety of the capital provided.

PPP Deal of the Year

Winner: Lima Airport Expansion PPP (Fraport, IFC)

Second place: Higher Education PPP Bundle 1 (Macquarie Capital)
Third place: Prospect Lake Clean Water Center (Ridgewood Infrastructure, IDE Technologies, City of Fort Lauderdale)

The Lima Airport Expansion PPP secured a significant $1.3 billion debt package last year, raising capital from a group of commercial and development banks to support the sponsors – Fraport and the International Finance Corporation – in building a new control tower and
second runway, both already completed, as well as a new terminal. The new control tower of the Jorge Chavez International Airport, which is Peru’s main domestic and international airport, is 65 metres high, while the second runway extends for around 3,480 metres, adding 10km of new taxiways, approach lights and beacon systems. It is expected that the airport, which in 2022 served more than 18 million passengers, will be able to serve 37 million passengers a year once the new terminal is up and running.

Power & Utilities Deal of the Year

Winner: Westinghouse Electric Company (Buyers: Brookfield Global Transition Fund, Cameco Corp. Seller: Brookfield Capital Partners IV)

Second place: National Gas (Buyers: Macquarie Asset Management, British Columbia Investment Management Corporation. Seller: National Grid)
Third place: Saur (Buyers: DIF Capital Partners, PGGM. Seller: EQT)

Brookfield’s Global Transition Fund acquired a 51 percent stake in Westinghouse, while uranium company Cameco acquired 49 percent, in a deal worth around $8.2 billion. Westinghouse is one of the world’s largest nuclear services businesses, which has long-term contracts with power plants around the world. Brookfield initially acquired the business out of bankruptcy in 2018 via its fourth buyouts fund, appointing a new management team and repositioning the company, refocusing the product and service offering, optimising the global supply chain and investing in new technology. Profitability has nearly doubled under the firm’s ownership so far. The deal equates to around six times invested capital and a 60 percent IRR. A fairness opinion was sought to mitigate any potential conflicts in the sale.

Energy Transition Deal of the Year

Winner: Commercial Renewables (Buyer: Brookfield Asset Management. Seller: Duke Energy)

Second place: CWP Renewables (Buyer: Squadron Energy. Seller: Partners Group)
Third place: London Array Offshore Wind (Buyer: Schroders Greencoat. Seller: Ørsted)

Brookfield acquired Duke Energy’s unregulated, utility-scale Commercial Renewables business in a deal that valued the asset at $2.8 billion. The 5.9GW portfolio spans utility-scale solar, wind and battery storage projects. There is also an additional 6.1GW in the development pipeline, making Brookfield one of the largest renewable energy owners in the US. The company has been renamed Deriva Energy.

Digital Infrastructure Deal of the Year

Winner: Vantage Towers (Buyers: KKR, Global Infrastructure Partners. Seller: Vodafone Group)

Second place: GD Towers (Buyers: Brookfield Asset Management, DigitalBridge. Seller: Deutsche Telekom)
Third place: Switch (DigitalBridge, IFM Investors)

KKR and Global Infrastructure Partners’ acquisition of Vantage Towers represented Germany’s largest ever take-private, with an enterprise value of more than €19 billion. Vantage is Europe’s second largest telecom tower company, operating around 83,000 radio mast sites across 10 countries. The two firms now intend to support an ongoing multibillion euro investment programme to improve Vantage’s infrastructure, and to expand and upgrade its network, as well as enabling the deployment of next generation technologies and fast-growing adjacent markets such as 5G private networks, data centres, edge computing, small cells and the deployment of fibre to the tower.

Placement Agent of the Year

Winner: Evercore Private Funds Group

Second place: Campbell Lutyens
Third place: UBS

Evercore’s Private Funds Group held final closes on 15 funds last year, representing around $49.1 billion of capital raised. The firm also held interim closes on $53.7 billion, bringing the aggregate total to $102.8 billion. Infrastructure highlights included the final close for I Squared Capital’s debut infrastructure credit and infrastructure growth markets funds. Evercore also held interim closings on four additional infrastructure funds during the period, equating to a further $13.4 billion raised. Other funds Evercore is working with include Antin Infrastructure Partners’ latest flagship and next gen funds, LS Power Fund V and Novacap Digital Infrastructure Fund I, with cumulative targets of $15.4 billion.

Power & Utilities Investor of the Year

Winner: Brookfield Asset Management

Second place: KKR
Third place: Macquarie Asset Management 

Brookfield Asset Management had a busy year in the power and utilities sector, most notably acquiring a 51 percent stake in nuclear services business Westinghouse via its Global Transition Fund. The firm also increased the 19.9 percent stake its super core fund holds in FirstEnergy Transmission, which it acquired in 2022. In February 2023, Brookfield acquired an additional 30 percent interest in a $3.5 billion all-cash deal. FirstEnergy Transmission owns and operates American Transmission Systems, Mid-Atlantic Interstate Transmission and Trans-Allegheny Interstate Line. The capital raisings have allowed First Energy to invest in a more resilient, modern and lower carbon electric grid.

Energy Transition Investor of the Year

Winner: Brookfield Asset Management

Second place: Partners Group
Third place: BlackRock

Aside from kicking off fundraising for its second global transition fund, for which it is targeting some $20 billion, Brookfield has been busy investing in various parts of the world. As a result, it has already deployed roughly 80 percent of its first global transition fund, which closed on $15 billion in 2022, across 18 investments. These include Westinghouse, which provides products and services to the nuclear power industry; Origin Energy, an electricity generation business in Australia with a large renewables platform; CleanMax, a leading renewables development platform in India; and Avaada Ventures, a renewables developer also in India.

Transport Investor of the Year

Winner: Brookfield Asset Management

Second place: Blackstone
Third place: Stonepeak

Brookfield currently owns 37,300km of rail operations, 3,300km of toll roads, 10 terminals and two export facilities. Over the past 12 months, the firm has closed one of the largest transport transactions globally, with the acquisition of Triton International, one of the world’s largest lessors of intermodal freight containers. The take-private deal had an enterprise value of $13.3 billion. Brookfield’s North American rail operation also announced a transaction with two railroad companies to create a new freight corridor that connects shippers in parts of Mexico and Texas with the US Southeast.

Digital Infrastructure Investor of the Year

Winner: DigitalBridge

Second place: Brookfield Asset Management
Third place: KKR

DigitalBridge manages $75 billion of assets under management and oversees a portfolio of 30 different digital infrastructure assets. It is the first specialist manager to rank amongst the top 10 largest infrastructure asset managers worldwide, increasing its assets under management by 46 percent last year. Meanwhile, notable investments for the firm included the acquisition of a 51 percent stake in Germany’s largest tower company GD Towers alongside Brookfield in a deal valued at €17.5 billion. The firm also acquired AMP Capital’s global infrastructure investment management business, rebranding it as InfraBridge. Other highlights included the $11 billion take-private of renewables-powered data centre platform Switch.

Sustainable Investor of the Year

First place: EQT

Second place: Actis
Third place: Vauban Infrastructure Partners

EQT further bolstered its sustainability credentials in 2023, with the appointment of Francesco Starace as partner. As chief executive of Enel, Starace helped transform the company into one of the world’s largest renewable energy producers. EQT also published net-zero guidelines, outlining firmwide targets and actions to achieve net zero by 2040, as well as rolling out net-zero training for all investment professionals to improve the firm’s carbon literacy. In addition, EQT supported eight portfolio companies in setting validated science-based targets with another four awaiting SBTi validation of their targets.

Mid-market Investor of the Year

Winner: I Squared Capital

Second place: iCON
Third place: Ancala

I Squared demonstrated a number of examples of developing mid-market infrastructure investment platforms in 2023, including the partial realisation of Cube Highways, an Indian toll road business which the firm created from scratch and grew through over 20 bolt-on acquisitions to become the largest privately held toll road business in the country. Meanwhile, new mid-market portfolio platforms created or acquired include UK environmental services platform Enva; distributed energy platform RPower; Australian heavy duty transport equipment rental company Rentco; Philippines-based distributed renewables platform Berde Renewables; smart metering business Polaris; and Silvertip, a water infrastructure company based in California.

Innovator of the Year

First place: I Squared Capital

Second place: Brookfield Asset Management
Third place: Antin Infrastructure Partners

I Squared Capital’s new infratech fund sees it claim the title of Global Innovator of the Year. The fund, which launched in 2021 and closed last year, raised $150 million for investment in growth stage companies that serve or disrupt infrastructure technology in traditional sectors such as power, transport, telecoms and social infrastructure. The firm is investing between $5 million and $30 million per deal. Early portfolio companies include 1NCE, a provider of connectivity and software for the Internet of Things at a global flat rate that has already received investment from SoftBank and Deutsche Telekom.

Bank of the Year

Winner: BNP Paribas

Second place: Crédit Agricole CIB
Third place: MUFG Bank

Highlights for BNP Paribas over the past year include its lead on the €1.4 billion green loan made to Italian high-speed rail operator Italo Nuovo Trasporto Viaggiatori. BNP Paribas also took the lead on a €7 billion debt package for KKR and GIP’s Vantage Towers deal and the A$1.5 billion ($970 million; €910 million) refinancing of Australia’s Tilt Renewables. Meanwhile, in December 2023 there was the launch of BNP Paribas Climate Impact Infrastructure Debt, an Article 9 fund targeting between €500 million and €750 million to support energy transition projects with a focus on renewable energy, clean mobility and the circular economy, including new sectors such as batteries, hydrogen and carbon capture.

Law Firm of the Year

Winner: Clifford Chance

Second place: Allen & Overy
Third place: Simpson Thacher & Bartlett

Clifford Chance advised on 100 infrastructure deals last year with an aggregate deal value of $74 billion. Highlights include the DP World UAE port assets transaction, valued at $23 billion and the $20.1 billion Autostrade per l’Italia transaction. Other key deals that the firm worked on included the $10 billion Tsau/Khaeb National Park Green Hydrogen Project; Macquarie’s $2.2 billion landmark equity raise for French battery manufacturer Verkor and Actis and Mainstream Renewable Power’s $1.5 billion sale of Lekela Power. Overall, Clifford Chance was ranked as the most active legal adviser in the asset class by both deal count and deal value.

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