AMP Capital reaches first close on second infra debt fund
AMP Capital has reached a first close of more than $300 million on its latest infrastructure debt fund. The vehicle has a full target of around $1 billion, roughly twice the size of its predecessor, which closed to new investors in June of last year.
The capital will be invested in the subordinated debt of infrastructure assets across the water, gas, electricity and transportation sectors in Europe, North America and Australia. The portfolio is expected to comprise debt issued by 10-15 companies, with investments ranging from $67 million to $100 million.
A total of 17 LPs from Japan, the US, South Korea, Switzerland and Australia participated in the first close of AMP Capital Infrastructure Debt Fund II (IDF II). New investors include one of South Korea's top insurance companies and a Swiss institution - the first time AMP Capital has secured an allocation from the country.
Japanese investors also feature prominently. Mitsubishi UFJ Trust and Banking Corp, which bought a 15% stake in AMP Capital for $432 million in 2011, serves as the Australian group's distribution partner in the country. This is the first direct infrastructure fund that Mitsubishi UFJ has marketed to its clients.
After Fund I drew commitments of $503 million from 30 global institutional investors, Andrew Jones, AMP Capital's global head of infrastructure debt, said Fund II had gained significant momentum among LPs.
"Investors globally are seeking stable high cash yield, defensive and predictable investments and that is why we've been so successful in attracting clients to IDF II," he said in a statement.
"We've also completed the Fund's first investment, securing a GBP50 million ($78 million) subordinated loan to Heathrow Airport. The team is pursuing a strong pipeline of attractive investment opportunities and we expect to announce further investments shortly."
AMP Capital's global infrastructure debt team comprises eight investment professionals located in London, New York and Sydney. As of June 2013, it had invested more than $1.8 billion in 38 infrastructure debt assets since 2001, generating an IRR of 9.9% and a cash yield of 10.1%.
At the end of last year, $285.2 million of the Fund I corpus had been deployed across six investments, with a gross IRR of 9.2% and a cash yield of 9%.
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