A GROWING appetite among European
banks and pension funds for infrastructure funds has seen the
asset-hungry Babcock & Brown raise nearly $1.2 billion more than
it planned for its new specialist investment vehicle.
In a move that follows the launch of
the rival Macquarie Group's third such European-based fund, B&B
yesterday closed the final round of the cash-raising exercise for
its first regionally focused unlisted trust with commitments of
€2.17 billion ($3.6 billion).
That was €600 million more than the
revised target that B&B set in July after investors originally
soaked up a first offering of €1.35 billion when the fund was
first closed in May.
B&B, which has targeted Europe as
the fourth part of an expansion strategy that takes in the US, Asia
and Australia, moved to top up its new European Infrastructure Fund
after committing €590 million of the original investment towards a
10 per cent stake in Portugal's largest toll-road operator.
The shareholding in Brisa, a
Lisbon-listed company that controls half of the country's motorway
market, has formed the cornerstone investment in the fund, which is
now on the lookout for further interests in the transport, water and
Antonino Lo Bianco, the group's
European head of infrastructure, said yesterday: "There is a
wealth of high-quality investment opportunities in Europe and we are
confident [we] will create a portfolio of carefully selected assets
that will deliver strong returns for our investors."
A B&B spokeswoman said all the
securities offered in the new fund were picked up by regional
institutions that were sitting on piles of surplus cash.
B&B has recruited dozens of
deal-makers working out of offices across Europe including London,
Paris, Rome, Munich, Madrid and Dublin to scour the region for
potential assets to be injected into the new fund.
The group's experience in attracting
European-based backers matches that of Macquarie, whose first
infrastructure fund was dominated by North American, Asian and
Australian investors but whose second unlisted vehicle attracted 80
per cent of its cash from continental groups.
An even higher proportion of local
investors is expected to take up the €5 billion offer that is
being sought by the Macquarie European Infrastructure Fund III.
While the successful fund-raisings
have underlined the demand for such investments, they have also
fuelled the fierce competition for infrastructure assets to feed
Macquarie and B&B are just two of
the Australian players active in the European industry, with AMP,
Colonial First State and Challenger all bidding to acquire similar