Australia's IFM hits first close on long-hold fund

AVCJ referenced the fund last month in an analysis of how the grey area between infrastructure and private equity is increasingly populated by managers on both sides experimenting in terms of risk appetite and duration of hold. The first close was reported by the Australian Financial Review and has since been confirmed to AVCJ by a source close to the situation.

Several of IFM’s 22 Australian superannuation fund shareholders, including Unisuper and Hostplus, are said to be among the first close investors.

The firm outlined its vision for LTPC in a white paper published earlier this year, noting that many businesses don’t conform to the traditional PE criteria. LTPC strategies “are complementary to traditional private equity models and the benefits they offer may help investors fill specific niches in their alternative asset allocations,” it said.

IFM regards LTPC as distinct from core and core-plus strategies, with LTPC. Core infrastructure is characterised by monopolies or exclusive operating rights and concession agreements. With core-plus, regulation is limited but businesses still enjoy dominant market positions and long-term contracted cash flows.

LTPC sits closest to traditional PE on the risk curve. Deals tend to feature favourable industry structures, strong market positions, ability to withstand disruption, positive cash flows, contracted or habitually occurring revenue streams, some cyclical exposure, limited regulation, and long-term growth prospects.

Areas seen as appropriate to LTPC encompass business and technology services, consumer staples, distribution networks, healthcare and aged care, logistics, packaging, and waste.

IFM has AUD 180bn in assets under management, mostly in infrastructure. Private equity accounts for AUD 900m. The firm is also raising a mid-market growth fund, which achieved a second close of AUD 380m at the end of 2021. The hard cap has been set at AUD 500m.

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• Topics
• Australasia
• Fundraising
• Buyout
• GPs
• Australia
• Fundraising