Cezary Podkul
The fund’s committed capital already eclipses the firm’s 11th energy buyout fund, which closed on nearly $8bn in 2006. The target is $12bn, which would make it the largest ever private equity fund to focus on the sector.
The privatisation is one of several options Will Kempton, the state’s director of transportation, is putting on the table as the state struggles with a $11.2bn budget shortfall.
The transaction is the recently-launched Challenger Emerging Markets Infrastructure Fund’s second deal and its first bolt-on to a platform company. Managing director hopes to replicate the Chilean strategy in Asian countries as the fund moves ahead with a $1.2bn fundraising effort.
Markus Pressdee, global head of infrastructure investment banking at Credit Suisse, also believes that in the near term infrastructure funds will continue to do deals with greater amounts of equity than in the past.
The fund will seek to invest in businesses that gather, process, store and transmit oil and gas products. Its previous funds have been focused on the upstream oil and gas sector.
The deal will be the largest yet for the infrastructure heavyweight and its first in the toll road sector after its consortium's $12.8bn bid for the Pennsylvania Turnpike expired in September.
The infrastructure heavyweight will scale down its business in response to a decline in deal flow and profitability.
Funds with riskier investments should weigh their managers' compensation plans with greater helpings of carried interest, while those managers of less risky assets should be paid a more routine base salary and bonus, according to a recent report from Mercer.
Tim Pfister and Jay Fortin, project finance and M&A lawyers at Patton Boggs in New York, also believe the political climate for foreign investors is likely to improve as the US comes to grips with its massive infrastructure spending needs.
As the struggling Australian infrastructure specialist works to unfreeze more than A$100m held by Germany's HypoVereinsbank, its 12 listed funds are likely to carry on 'business as usual', according to a person familiar with the matter.