Alinda Capital Infrastructure Investments intention to float – pretty soon after the announcement of the intended launch of an infrastructure trust by Pantheon, along comes another.
The company is seeking to raise £350m from a placing and offer for subscription of shares at 100p. In addition, a placing programme will enable the company to issue a further 650m ordinary shares and/or C shares over the 12 months following initial admission.
As usual, there are geographic restrictions on who may invest – US investors are particularly unwelcome. [It would be nice if one day that wasn’t the case, but it is for US legislators to sort and there’s nothing we can do to influence that.]
Highlights
Alinda Capital Infrastructure Investments will seek to generate attractive total returns (on a risk adjusted basis) for shareholders over the longer term, comprising capital growth and a progressive dividend, through investment primarily in core-plus, mid-market infrastructure and infrastructure-related investment opportunities globally.
The company is targeting NAV total returns of between 10% and 12% a year (over the medium-term following full investment of the net proceeds of the initial issue (see below for timescale). The company is also targeting an initial dividend of 3.5p in its first full financial year ending on 31 December 2022, rising to 5p in the second full financial year ending 31 December 2023, and, thereafter, a progressive dividend.
The investment manager is Alinda Advisors LLC. Alinda was formed in 2005 and views itself as one of the most experienced firms in infrastructure. It established one of the first infrastructure funds in the United States and was a pioneer in introducing the infrastructure asset class to the investment industry globally. Alinda has deployed $12.5bn in 15 years. Alinda’s track record in mid-market deals to 30 June 2021 works out as a gross IRR of 19.3%, a gross average cash yield above 8%, and a 1.8x gross multiple on invested capital (MOIC).
Alinda Capital Infrastructure Investments will focus on core-plus, mid-cap infrastructure, as a fast growing area of infrastructure, with an emphasis on the transport & logistics infrastructure, utility-related and digital infrastructure sectors. It will invest in opportunities that are (i) part of a sub-sector that is adjacent to traditional sectors, (ii) available through a proprietary bilateral negotiation, and/or (iii) seeking capital where price is only one of the factors being considered. You can see some of the manager’s current investments here.
Alinda has identified a number of infrastructure investment opportunities and the total equity opportunity in these pipeline assets is equal to approximately $660m. Alinda’s expectation is that the company will be able to deploy capital on an increasing basis over 24 months, with over £200m committed in the first three months after initial admission assuming that the target size of the issue is reached. Within 18-24 months after initial admission, Alinda expects a total equity opportunity of £500m to £600m could be deployed.
Alinda Capital Infrastructure Investments will be a significant investor in Alinda Infrastructure Parallel Fund IV Sterling L.P., a parallel fund which is part of Alinda Infrastructure Fund IV, the flagship private fund managed by Alinda. The company also intends to make direct investments, either on its own or alongside third-party partners.
The company has adopted Alinda’s environmental, social and governance (ESG) policies and integrates ESG considerations throughout the lifecycles of all its portfolio investments.
Publication of the prospectus should happen next week and the announcement of the results of the initial issue is expected in late November 2021.