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Infrastructure Manager of the Year
Brookfield Asset Management
Brookfield, a Canadian alternative asset manager with $240 billion under management worldwide, has raised what might be the largest private infrastructure fund ever, the $14 billion Brookfield Infrastructure Fund III. Closing on July 12, the fund bust its original $10 billion target, with the help of a $4 billion commitment from the asset manager itself. Brookfield has already earmarked $3 billion for investment in projects ranging from US hydroelectric power to a portfolio of Peruvian toll roads. The firm’s infrastructure arm has a distinct “owner-operator” model, deploying the hands-on expertise of its 160-strong team – and 13,000-strong operational workforce – to control and run the projects it buys. The company says its infrastructure funds have generated gross returns of 15% a year since the inception of those funds and March 31, 2016 – and 13% a year net. Brookfield, which is listed on the New York, Toronto and Amsterdam stock exchanges, is about 20% owned by its management and staff.
Global Infrastructure Partners
The US firm was founded in 2006 by former Credit Suisse and General Electric executives. In the past decade it has raised more money for infrastructure than anyone except Macquarie – $27.5 billion, according to Preqin. Its third fund, Global Infrastructure Partners III, held a second close in May having raised $10.8 billion, and is pressing on with a target of $12.5 billion. It, and Brookfield’s fund, look set to become the largest two infrastructure funds ever raised, according to Preqin. In February, the firm sold its 75% stake in London City Airport – owned by its first fund – to a consortium of Canadian pension funds plus the Kuwaiti sovereign wealth fund. Under GIP’s ownership, London City Airport grew from 2.4 million passengers in 2006 to 4.3 million in 2015.
Hermes Investment Management
Hermes, the fund manager owned by the BT Pension Scheme, has been investing in infrastructure on its parent’s behalf for nearly 20 years. In April 2015 it closed its first fund – the Hermes GPE Infrastructure Fund – at £1.2 billion, having originally targeted £800 million. In the past year, the firm has begun deploying that capital, including two high-profile investments – a 10% stake in Eurostar and a 33.3% stake in Associated British Ports. Hermes also offers a volume discount to local government pension funds in the UK, aimed at preparing the way for their forthcoming mergers. In the three years to March 31 2016, the fund has returned a gross 12.2% a year on average, outperforming the Macquarie Global Infrastructure Index 100, which has made 8.6% a year.
M&G Infracapital, which is the infrastructure investment arm of the Prudential and manages £2.4 billion, has had a bumper year for investment returns. Its first fund made a gross return of 39.6% for the 12 months to December 31 2015, helped by the sale of its stake in Associated British Ports, on which it made a 3.3x return. Its second fund, which closed in October 2014 with £1 billion in commitments, made a total return of 22.3% during the 12 month period. In late 2015 this fund acquired stakes in a Slovak utility firm GGE in an exclusive deal and the Nordic energy infrastructure group Adven in an unusually short timeframe.
In the past decade, Macquarie’s infrastructure and real assets division has raised more money for its unlisted infrastructure funds than any rival infrastructure manager – $29.7 billion, according to figures from Preqin. In February 2016, it closed its latest major fund – the $3.1 billion Macquarie Asia Infrastructure Fund – having raised $850 billion more than its original $2.25 billion target. Meanwhile, in April, the group’s London-based Macquarie Infrastructure Debt Investment Solutions launched a second inflation-linked infrastructure debt fund, following the close of its pioneering first fund in mid-2015 with £859 million, plus about £650 million in segregated accounts.