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The initial funding is slated to close at the end of August.
Philip Garling, global head of infrastructure at Sydney-based AMP Capital, says the firm is asset-raising among Asian investors. ôAsian markets are expected to invest significantly in infrastructure in the future, and this will provide investment opportunities for the private sector.ö
AMP Capital is the latest of several players that have introduced or are preparing infrastructure funds that target the big markets of Asia and the Middle East. Until last year, Asian deals were few, and were usually included in global products. But now the likes of Babcock & Brown, Global Investment Partners, Morgan Stanley, RREEF and Standard Chartered are offering Asia-focused infrastructure funds û ultimately following in the footsteps of AIG and Macquarie Capital Partners, the regionÆs two grandfathers of infrastructure investing.
There is plenty of need among Asian countries for infrastructure investment, and in theory projects for all of these entrants and their investors: ôThe infrastructure spend requirement in Asia is estimated to be three times higher than the global average,ö says Garling.
The firm is not a stranger to the region: since 1999 it has managed an India infrastructure fund. It is new to China, so it has teamed up with China Life Asset Management, which will help source deals, says Anoop Seth, head of infrastructure at AMP Capital Investors. AMP Capital also has an office in Singapore, established two years ago, to help find projects. It now manages $3.2 billion in infrastructure investments in Asia, Australia, New Zealand and Europe.
AMP CapitalÆs Giants fund has already made its first investment, a stake in IndiaÆs Gayatri Infra Ventures, a newly formed company with a BOT (build/operate/transfer) construction business including a toll road. The Giants fund invested Rs1 billion (about $25 million).
The fund seeks investments mainly in unlisted entities engaged in the development, ownership or operation of infrastructure or infrastructure-related facilities in areas including transport, telecoms and power and energy. It is a seven-year closed-end fund (unlisted) for institutional investors. China and India will account for up to 70% of invested assets, other Asian countries up to 30%, and each project limited to 20% of the portfolio. It seeks an internal rate of return of at least 20% a year in US dollar terms.
A strong recovery in the Asia Pacific private capital markets in 2021 sets up favourable hiring and compensation trends.
The $95 billion Korean savings will set up a separately managed account for real estate debt investment early next year in order to shorten decision-making and help it win deals in a crowded market.
The fund's 29.6% returns marked its best ever and exceeded its reference portfolio, which has 80% allocated to equities, by 1.73%.
The enlargement of the Bond Connect scheme, announced on Wednesday (Sep 15), gives Chinese investors another option for allocating capital offshore.