Australia's PEP hits $433m first close on secure assets fund

The vehicle was launched earlier this year with a target of A$750 million and a hard cap of A$1 billion. The first investment came in May with the acquisition of Origin Energy's Acumen smart meters unit. PEP teamed up with Landis+Gyr, overcoming strategic competition with a A$267 million ($202 million) bid. An additional A$500 million was raised to support a nationwide smart meter roll-out, allowing for substantial LP co-investment.

PEP has previously backed companies that generate consistent infrastructure-style yield and offer additional upside through an active management approach, but it was also unable to act on other opportunities, largely due to cost of capital issues. The secure assets fund is intended to fill this space. Paul Foster, formerly head of infrastructure for Australia and New Zealand at AMP Capital, joined last year to work on the fund alongside existing members of PEP's investment team.

"We are excited about this space, which sits between traditional infrastructure investment, where I have spent the last 18 years, and the type of performance and growth initiatives that are the hallmark of PEP's traditional investments," Foster said in a statement.

The firm is currently looking at other opportunities across energy, utilities, transportation, logistics, telecommunications, and healthcare.

PEP is expected to launch its sixth flagship buyout fund next year. Fund V closed at the hard cap of A$2.1 billion in 2015. Fund IV, which had a corpus of A$4 billion, was considerably larger but it included A$1.3 billion in non-discretionary co-investment capital allocated on a pro-rata basis. Co-investment is discretionary for Fund V so there was no need for the sidecar.

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• Topics
• Australasia
• Fundraising
• Infrastructure
• Infrastructure
• Australia
• Pacific Equity Partners
• Fundraising