Pantheon Infrastructure targets £300m IPO

Pantheon Infrastructure targets £300m IPO – Pantheon Infrastructure (PINT) has announced its plans to launch an initial public offering and to admit its Ordinary Shares to the premium segment of the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange Main Market.

PINT will target attractive risk-adjusted total returns comprising capital growth and a progressive dividend through making equity and equity-related investments in private infrastructure assets alongside other leading private asset investment managers and institutional investors. 

It is seeking to raise £300m via a placing, an offer for subscription and an intermediaries offer. Pantheon Ventures will be its investment manager. 

The company expects to publish the prospectus in connection with the issue later this week.  Admission is expected in mid-November.   

Key highlights:

• An investment in the Company will enable investors to gain exposure to a high-quality mix of yielding and growth infrastructure assets with strong downside and inflation protection in developed markets. Target assets will typically benefit from defensive characteristics, including contracted cash flows, inflation linkage, conservative leverage profiles and strong Environmental, Social and Governance (ESG) credentials.³
• The Company will acquire equity or equity-related investments in private infrastructure assets alongside leading Sponsors and institutional investors (co-investments), predominantly on a no management fee and no carried interest basis on the underlying assets.
• The Company is targeting a NAV Total Return per Share of between 8 and 10 per cent. per annum following the full investment of the net initial proceeds.
• The Company is targeting an initial dividend of at least 2 pence per Ordinary Share in the first financial year ending 31 December 2022, rising to 4 pence per Ordinary Share for the financial year ending 31 December 2023 (following full investment of the net initial proceeds) and, thereafter, a progressive dividend. The Company intends to pay dividends on a semi-annual basis.
• Pantheon’s primary relationships and network of Sponsors have allowed it to be a preferred co-investor, screening a high volume of proprietary transactions. Its ability to provide capital solutions in complex scenarios is expected to continue to generate differentiated deal flow to acquire high-quality and difficult-to-access assets for the Company’s portfolio.  Since 2015, the Investment Manager has committed $2.7 billion to 34 co-investment transactions, delivering risk-adjusted returns of gross / notional net IRR of 18.5 per cent. / 16.7 per cent.
• The opportunity in infrastructure today is significant, with a projected $13 trillion shortfall in capital expenditure globally needed to improve aging infrastructure and build new projects by 2040⁸, coupled with the additional requirement to improve the safety, sustainability and connectivity of existing infrastructure systems. Infrastructure transaction volumes have increased steadily over the last five years and, despite the global pandemic, 2020 remained a relatively resilient year for infrastructure deal activity with over $500 billion of transactions closed.

Pantheon aims to build a global portfolio of investments for the Company with blended risk/return profiles capturing attractive investment opportunities across infrastructure sectors which will include: 

• Digital infrastructure (including wireless towers, data centres and fibre-optic networks) is benefiting from very strong growth in demand for mobile data usage, cloud services, fibre networks, and 5G.
• Renewables & energy efficiency (including smart infrastructure, wind, solar and sustainable waste) is integral to the decarbonisation transition of the global economy and further investment will be required in the development of the circular economy.
• Power & utilities (including transmission and distribution networks, regulated utility companies and efficient conventional power assets) are adapting to the increased penetration of renewables in the energy mix, necessitating investment in new distribution and transmission networks and supporting infrastructure.
• Transport & logistics (including ports, rail, roads, airports and logistics assets) offer shorter-term recovery opportunities from demand for leisure travel as well as exposure to longer-term demographic and economic changes, most notably growth in e-commerce and continued urbanisation.
• Social & other (including education, healthcare, government and community buildings) may include lower-risk concession-based infrastructure that can offer a stable yield whilst delivering essential services to local and national governments.

Pantheon has a pipeline of co-investment opportunities in active diligence of over £1bn as at 8 October 2021, predominantly on a no management fee, no carried interest basis, and will seek to assemble a diversified portfolio of 8 to 12 assets within 9 to 12 months of the IPO. 

Pantheon considers ESG to be an integral part of investment risk management and value creation. Pantheon have classified the Company as an Article 8 “light green” product following an internal assessment of the application of the EU Sustainable Finance Disclosure Regulations. The Company will not invest in infrastructure assets whose principal operations are in any of the following sectors: Coal, oil, upstream gas, nuclear energy and mining.

IPO investors will benefit from Subscription Shares issued on a 1-for-5 basis. The Subscription Shares will be separately listed and traded on the London Stock Exchange. The Subscription Shares will have a single subscription price of 101 pence and can be exercised in any of the month-ends of June, July and August 2022. The Subscription Shares will provide the Company with additional capital at or around a point in time when the Company is expected to have deployed the IPO proceeds. The opportunity to participate in such a capital expansion will be solely at the discretion of holders of Subscription Shares (and therefore IPO shareholders to the extent that they have not sold the Subscription Shares at the time of exercise).

Vagn Sørensen, Chairman of the Company, said: “We are very pleased to announce the launch of PINT, which is an exciting opportunity for investors to gain access to attractive risk-adjusted returns from infrastructure assets that benefit from long-term contractual cash flows, and have a positive correlation to inflation and favourable exposure to secular changes in society.

“Pantheon has a proven track record of delivering strong returns by applying a disciplined investment process across a globally diversified portfolio and we are confident that their approach, which focuses on co-investing, thus minimising fees while maximising the number of investment opportunities it can access, offers a compelling and differentiated opportunity for investors.”

Richard Sem, Partner, Pantheon, added: “There is a growing and substantial requirement for investment in a number of different infrastructure sectors globally, where private capital is playing an increasingly important role in adapting to key global trends such as the transition to a low-carbon economy. Pantheon has a strong track record built over more than a decade derived from identifying compelling opportunities, in conjunction with leading investment partners, and supporting the growth and development of infrastructure companies in a diverse range of sectors. The strategy is expected to deliver a robust income stream and capital growth from creating value in the underlying portfolio companies.”

Pantheon Infrastructure targets £300m IPO