Philippines launches first infra fund

First, appropriate regulation and government support for private sector investment in infrastructure was required.

Second, a fund manager was had to be found with the appropriate model and expertise in new markets as well as experience in the Philippines in particular. That's where Macquarie Infrastructure and Real Assets (MIRA) stepped in, bringing with it a track record in launching infrastructure funds in emerging markets including China, India, Mexico, Africa and Russia.

"MIRA has a strong track record in terms of establishing first-time infrastructure funds, and the Philippines is a continuation of that evolution," Frank Kwok, a senior managing director for MIRA in Asia, tells AVCJ. "Our decision to establish PINAI now is a result of significant prior due diligence and Macquarie's long standing presence in the Philippines."

As the fund manager, MIRA will control how the $625 million raised from LPs gets deployed. The vehicle reached its target size with its first and final close, which was announced last week. Alongside Macquarie itself, investors include the largest Filipino pension fund, Government Service Insurance System (GSIS), Dutch pension fund asset manager APG, and the Asian Development Bank, all of which played an active role in the selection process of MIRA as the GP and the development of its investment mandate.

PINAI will invest equity and equity-like instruments directly in infrastructure businesses and projects in the Philippines. These will include brownfield and greenfield projects across segments such as transport, power, renewable energy, water and telecom infrastructure.

MIRA's Kwok expects such opportunities to become increasingly accessible in the coming years because strong government support for infrastructure development now exists, allowing investors to take advantage of the nation's young, fast-growing population and projected economic growth. "The main impediment in capturing this demographic dividend has been the country's historical underinvestment in infrastructure. We believe the tide is turning in this regard and we have been encouraged by the steps the administration has taken to promote private investment and the progress being made by the government's PPP programme," says Kwok.

As an early participant in the Korea's public-private partnership program, MIRA also takes comfort from the Philippines' track record of private sector investment in the power and road segments. It is seeing opportunities open up in other, related, areas as well.

"The time hasn't been quite right for a Philippines-focused infra fund before," adds Kwok, "But MIRA has a differentiated approach when it comes to making our funds successful."

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• Topics
• Southeast Asia
• Fundraising
• Infrastructure
• Infrastructure
• Fundraising
• Macquarie Group
• Philippines