Aberdeen Asset Management has launched its fifth infrastructure fund, The Aberdeen Global Infrastructure II, which has received initial commitments from a range of Asian institutional investors.
The new fund will invest in social and economic infrastructure projects underpinned by long term secure government contracts characterised by stable and partially inflation linked cash flows.
It will invest in all major sectors of social and economic infrastructure including, but not limited to, health, education, social housing, government accommodation, roads, bridges, rail, rolling stock and waste management.
Aberdeen has a bias towards greenfield infrastructure and is focused on geographic areas where it sees a level of political stability and visibility on government infrastructure procurement policy. Outside Europe, the potential for investment in infrastructure is very promising, with Australia still proving to be one of the most active markets for PPP (Public Private Partnership) investors. Activity in North America is on the increase although this comes with the added complexities of a state by state procurement regime and little input from central government. This is not a barrier for investors but does require a more pro-active approach to securing mandates on the ground.
The 24-strong team is led by Gershon Cohen. It already invests in over 90 projects around the world with team members based locally to oversee investments and identify new opportunities.
Cohen says: “We’re delighted with the launch of our fifth infrastructure fund. We will employ the same investment approach as we do for our other mandates. Our focus is on undertaking rigorous due diligence before investing; leveraging off the numerous deep relationships we have built with industry partners across different geographies and sectors and being actively involved with projects.”
Andrew McCaffery, global head of alternatives at Aberdeen, says: “The interest in this fund is an insight into the increasing demand from institutional investors who are attracted by the potential for a stable income over a sustained period. It is also a reflection of the growing allocation to Alternative investments and strategies from an ever increasing number of investors. The long-term nature of infrastructure investment is consistent with Aberdeen’s philosophy and approach.”
Aberdeen currently manages approximately USD2.2 billion (as at 31 June 2014) in infrastructure mandates on behalf of clients around the world.