PATRIZIA acquires infrastructure investment manager Whitehelm Capital
PATRIZIA AG, a partner for global real assets, has entered into a share purchase agreement for the acquisition of Whitehelm Capital, an independently owned infrastructure manager.
With the acquisition, PATRIZIA will increase its Assets under Management (AUM) to over EUR50 billion in line with its mid-term growth strategy. The acquisition will triple PATRIZIA’s infrastructure AUM to circa EUR5 billion and PATRIZIA is aiming to grow the segment in the mid-term to EUR15 to 20 billion.
Whitehelm’s product offering and investment expertise will significantly broaden PATRIZIA’s portfolio of investment solutions with a particular focus on smart cities & digital infrastructure, de‑carbonisation & energy transition, water and environmental services, and social infrastructure, across equity, debt, and public listed infrastructure investments.
With more than 60 investment specialists in Australia and Europe and a track record of more than 100 infrastructure investments, Whitehelm has achieved for its clients an Internal Rate of Return (IRR) of 11.9 per cent for global core infrastructure investments since inception. Whitehelm’s investment clients are predominantly pension funds located in APAC and Europe. With offices in Sydney, Canberra and London, Whitehelm will further expand PATRIZIA’s global reach and strengthen its footprint in APAC supporting PATRIZIA’s growth strategy in the region. Whitehelm currently manages EUR 3.2bn AUM with EUR1.6 billion additional commitments and has over EUR 22bn funds under advice for institutional, government, and private clients in Australia.
“We are delighted to welcome Whitehelm to PATRIZIA. The combination of our strengths, expertise and global footprint is highly complementary and will enable us to create significantly more investment choices for our clients”, says Wolfgang Egger, CEO and founder of PATRIZIA. “Whitehelm and PATRIZIA also represent a perfect cultural fit. We both put clients first to provide superior services. We both have a strong track record as independent investment managers being close to our clients and creating value for them. And we share a clear commitment to sustainability and making an impact. This acquisition represents a key milestone to strengthen our offering as a leading partner for global real assets.”
“Whitehelm is a perfect strategic match for PATRIZIA. With this transformational acquisition that significantly expands our infrastructure expertise, we ascend to the next level as a global partner for real assets. And we strengthen our footprint in APAC to support our growth opportunities in the region,” comments Thomas Wels, Co-CEO PATRIZIA. “We are in a sweet spot to benefit from the fast-growing global infrastructure market. Whitehelm and PATRIZIA’s unique complementary expertise will be a springboard to grow our infrastructure AUM dynamically and at the same time accelerate the execution of our ESG strategy.”
Graham Matthews, Chief Executive and founding shareholder of Whitehelm, says: “It was absolutely essential for us to find the right partner who brings clear additional value to our clients, embraces long-term thinking and has a strong track record in the industry. So, we are really excited about partnering with PATRIZIA as they are a perfect cultural and strategic fit for us. Their strong entrepreneurial mindset and track record as an independent investment manager really impressed us. PATRIZIA will enable us to expand our client reach in Europe and offer attractive infrastructure investment opportunities to PATRIZIA’s large international institutional and private investor base. The combination of our expertise, portfolio offering, and global footprint will bring many attractive long-term investment opportunities to all our stakeholders.”
Strengthening PATRIZIA’s real asset expertise and accelerating ESG strategy execution
Through the transaction, PATRIZIA will be well positioned to leverage the predicted strong demand for infrastructure over the next 20 years for its clients. Global infrastructure investments are expected to rise by 35 per cent from currently USD2.8 trillion to over USD3.8 trillion a year by 2040 (Source: G20 Global Infrastructure Outlook). PATRIZIA’s clients will benefit from the expected construction super cycle and stable infrastructure returns thanks to the significantly expanded infrastructure investment opportunities provided by Whitehelm.
The acquisition also accelerates the execution of PATRIZIA’s sustainability strategy execution with the clear ambition of achieving net zero carbon emissions in respect of more than 70% of AUM by 2040. Whitehelm is a signatory of the United Nations Principles for Responsible Investments, UN PRI, and achieved an A+ rating from the initiative, the highest score for overall implementation of ESG in its strategy and governance activities. Whitehelm recently celebrated the fifth anniversary of its Low Carbon Core Infrastructure Fund.
The acquisition will further enhance PATRIZIA’s quality of earnings and stability of revenues to create long-term value for shareholders – more than 80 per cent of Whitehelm’s revenues come from highly recurring management fees with long duration. The transaction is fully in line with PATRIZIA’s communicated strategy to become a leading partner for global real assets.
The initial purchase price payment for the fully complementary acquisition is EUR 67m payable in cash and PATRIZIA treasury shares. The total purchase price is based on an earn-out structure and can reach a low three-digit EURm amount if ambitious mid-term revenue growth targets are met. The earn-out will also be paid in a combination of cash and PATRIZIA shares. Whitehelm shareholders have agreed to a lock-up period for the PATRIZIA consideration shares, fully aligned to the interests of PATRIZIA shareholders.
Closing of the transaction is subject to regulatory approvals and is expected to take place in Q1 2022.