State-backed infrastructure fund set to see €1bn portfolio broken up

The Irish Infrastructure Fund (IIF), run by Australia’s AMP Capital and backed by State money, is set to see its €1 billion-plus portfolio broken up as the managers of the portfolio assess bids for its assets.

AMP Capital, the manager of the fund, initially called during the summer for potential bidders to put in bundle offers for the assets. They comprise a contract to operate the Convention Centre Dublin, fibre networks company Enet, primary healthcare firm Valley Healthcare, and telecom towers business Towercom.

However, sources said that, following first-round bids last month, AMP is now progressing with an infrastructure investor on some assets, while a number of parties have been invited into a final round on the others. They declined to comment on what assets may be sold together, or to identify bidding parties.

Infrastructure deals publication Inframation has reported that UK infrastructure group John Laing Group, which was bought by US private equity giant KKR last year, is among the bidders.

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Canada’s Brookfield Asset Management, which bought and sold Irish wind farm assets in the past decade and acquired office group Hibernia Reit last June, also ran the rule over the assets, it said.

Netherlands-based DIF Capital Partners, which previously owned stakes in the M50, M4 and M3 motorways in the Republic, UK investments giant Abrdn, and 3i Group, owner of Belfast City Airport, are also said to have expressed interest in the assets.

IIF was set up by Irish Life Investment Managers in 2011, with €250 million of backing from the State’s Ireland Strategic Investment Fund (ISIF), then known as the National Pensions Reserve Fund. AMP was appointed at the discretionary manager of the fund.

Representatives for AMP, ILIM and ISIF declined to comment on the sale. There are about 20 investors in the fund. The €1 billion figure is an enterprise valuation, including debt. US investment bank Jefferies and IBI Corporate Finance in Dublin are managing the process.

The IIF started off in 2012 by buying wind farm assets from Energia Group (then known as Viridian) that would ultimately be sold again. In 2013, it purchased Towercom, with a portfolio of more than 400 telecom towers, from clients of Goodbody Stockbrokers.

In 2015, the fund acquired a licence to operate the Convention Centre Dublin until 2035 from the receivers of Treasury Holdings, before moving in 2017 to buy control of Enet and set up Valley Healthcare. That business currently has 20 operating healthcare centres, with a further six in development.

AMP Capital and key IIF investors began to consider the long-term future of the fund three years ago, sources said, with options including raising more money to continue to invest, even amid heightened competition for assets from overseas investment funds, or a sale of the portfolio.

While a formal decision to sell was only made earlier this year, there was a general consensus by the end of 2020 that this would be the outcome, they said.

However, the review also occurred against the backdrop of the fallout from revelations in 2020 that Boe Pahari, who was hired a decade earlier to head AMP Capital’s European infrastructure business and led some of the early IIF deals, had been promoted as head AMP Capital, even though the wider AMP Group knew he had settled a sexual harassment claim brought by a female colleague.

Mr Pahari left AMP Capital in April 2021. However, the episode had already prompted disquiet among some investors in the IIF, including ISIF, which told online publisher The Currency in August 2020 that it had “raised its concerns about these matters with AMP Capital, and discussed them with Irish Life and shareholder advisory groups”.