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August 20, 2009

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Home » Business » Finance

Firms eye infrastructure funds

MACQUARIE Group Ltd and China Everbright Ltd plan to launch two funds to raise a total of US$1.5 billion to invest in infrastructure projects in China.

The two companies have jointly formed an asset management company to manage the two funds, with each targeting a first close in 2010. The firms have committed a total of US$100 million as sponsors of the funds, they said in a joint statement yesterday.

The first fund will be open to foreign institutional investors targeting core infrastructure opportunities primarily in toll roads, airports, renewable energy, water and waste water, as well as ports and railways, the statement said.

The Chinese government has encouraged foreign companies to invest in the above sectors.

The second fund will target domestic investors and still awaits Chinese regulatory approval. It was proposed that the funds have identical mandates and invest in step with each other.

"China has a long history of private and foreign sector investment in infrastructure, with well developed national policies promoting infrastructure investment to improve business efficiency and national wealth, while encouraging foreign capital and operating expertise," said Chen Shuang, Everbright's chief executive officer.

Macquarie Group, Australia's biggest investment bank, is one of the largest infrastructure fund managers globally, with over 25 funds managing over 100 infrastructure assets. It had US$36 billion of infrastructure equity under management as of June 30.

CLSA, First Eastern Financial Investment Group and Blackstone Group have also announced plans to launch yuan-denominated funds on China's mainland since last Friday.

Hong Kong-based brokerage CLSA said on Tuesday that it planned to set up a private equity fund with state-owned Shanghai Guosheng Group Co to collect 10 billion yuan.


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