Sweden’s Första AP-fonden, one of they so-called buffer funds in the Swedish pension system, is among the key institutional investors that have committed to the Greenfield Fund, a vehicle focused on development and construction and which is offered by Infracapital, the unlisted infrastructure equity investment business of M&G Investments.
The fund has raised commitments of £1.25bn (€1.4bn), which is above the original £1bn hard cap target. Some 85% of the commitments have come from pension funds and insurers. By geography, Swedish institutions account for 15% of commitments and UK investors some 50%.
The development, construction and expansion projects targeted by the fund are to be found in a number of sectors, including communications, energy, renewables, ‘social’ infrastructure, transport and utilities, M&G Investments stated. The fund has already committed 43% of its capital to five key projects:
- Gigaclear, a broadband developer providing high-speed fibre optic broadband networks to the UK’s underserved rural communities
- Bioenergy Infrastructure Group (BIG), a UK biomass and Energy from Waste aggregation platform with potential generation capacity in excess of 100MW
- C2i, a diversified portfolio comprising five social infrastructure assets in Italy, providing core public services in the health, transport and security sectors
- Infram Energy, a joint venture with Amarenco Solar to invest in greenfield renewable energy assets across France, Ireland and other European markets
- Nexera, a joint venture with Nokia to invest in a Polish government sponsored initiative to roll out broadband infrastructure in the country
Robert Heaney, M&G Nordic Region director, said: “The potential for new infrastructure development across Europe today is enormous, providing pension funds and insurance companies with increasingly attractive investment opportunities, as the EU encourages further investment through the so called ‘Juncker plan’.
“This latest capital raising demonstrates that there is strong appetite from Swedish investors to access infrastructure projects at an earlier stage, providing the usual characteristics investors are attracted to but with an enhanced return profile.”
The fund is expected to be 50% committed by the end of the year, according to Andy Matthews, head of Greenfield, Infracapital.
Infracapital owns two utility companies in the Nordic region, including Falbygdens Energi, a producer and distributor of district heating and distributor of electricity within the Swedish municipality of Falköping, and Adven, a provider of sustainable and business critical tailored corporate energy solutions and district heating in Finland, Sweden and Estonia.