Edmond de Rothschild AM launches second infrastructure debt fund

ftseglobalmarkets.com

Edmond de Rothschild Asset Management is launching its second infrastructure debt fund, Benjamin de Rothschild Infrastructure Debt Generation, as part of its ongoing development of the BRIDGE platform. The new Luxembourg-regulated fund will have the same investment philosophy as the previous generation and is aiming to raise between €400m and €800m. The fund is the second on the firm’s BRIDGE platform and both funds will be involved in co-investments that meet investment mandates.

The asset management firm says the fund seeks to broaden the range, capturing fresh opportunities, whether at the project or operational stage, which have been identified by the investment team and are available on the market. The firm says that infrastructure debt benefits from robust fundamentals as assets have good credit ratings, low volatility, stable cash flow and long maturities. It also boasts highly visible yields which reflect a certain illiquidity premium. Most infrastructure assets are monopolies and provide essential services to their markets. They also benefit from political back-up and regulatory incentives, it adds. With rates set to stay low for some time and amid ongoing banking disintermediation which has prompted the arrival of new players offering alternative funding solutions, investing in infrastructure debt creates opportunities for long term investors looking for yield. These investments provide institutions with a diversification tool.

The first BRIDGE fund was set up in August 2014 for French institutions such as insurance companies, provident societies or mutual funds. It has already made a number of investments and more are to come. It totals €595m and has invested 71% of its commitments. In 18 months, it has invested €420m, going well beyond its initial target, and now has a diversified portfolio of assets in conventional and renewable energy, road, rail and air transport and social infrastructure (healthcare and Private Finance Initiative or PFI deals) in France, Germany, Austria, Belgium and the UK.  The second BRIDGE fund will capitalise also on the strong pipeline of transactions available to its team across Europe, including in the UK. The BRIDGE platform will maintain a specific focus on addressing UK investment opportunities and investor interest. The fund is designed for all French and European institutional investors.