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ABP, Greater Manchester commit to European infrastructure fund

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EUROPE - The Netherlands' largest pension fund, ABP, and the £10bn (€11bn) Greater Manchester Pension Fund (GMPF) have been confirmed as two of the institutional investors in a new infrastructure fund, currently searching for seed capital.

ABP's investment, by its asset manager APG, marks the second time the scheme has invested in funds launched by EISER Infrastructure, following on from the previous €1.1bn EISER Fund I.

Spokesmen for both APG and Greater Manchester declined to confirm how much of the current €277m in commitments came from either scheme, but BNP Paribas Investment Partners has committed €100m to the fund, according to Infrastructure Investor.

Hafeez Ahmed, partner at EISER, told IPE that the new fund would target OECD countries within Europe, with up to 15% of the targeted €1bn capital invested in the UK.

"I think that is basically reflective of the deal flow of the market now, whereas five to six years ago there was less deal flow in continental Europe. We think this how the market has evolved over this period of time."

EISER Fund I made 10 of its 11 investments in Europe, with investments including the acquisition of Belfast City Airport in 2008 and ESP Gas Group two years prior. Over two-fifths of its €1.1bn capital was invested in energy projects, with transportation ranking distant second at 28%.

Ahmed downplayed the importance of transportation for the current fund, saying they would be examined on a selective basis. Instead, he highlighted private finance initiatives and public private partnership as an area of interest.

Discussing which countries Fund II would seek to invest, Ahmed conceded Germany was a possibility, saying that it was proving a more interesting location from a risk/return perspective than when the first fund was launched.

"The Scandinavian region is interesting from a renewable perspective but it has not been an area of particular focus. However if the risk/return profile is appropriate this is something we'll look at," he added.

A spokesman for Greater Manchester said of its commitment: "GMPF is a hard-nosed commercial investor and the main reason for the commitment to the fund were the relative strengths of the asset class and the manager."

A spokesman for APG added: "We hope and trust that the second part of the fundraising will be successful and we want them to reach the threshold."
 

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