Mitsui, the Japanese conglomerate, and Challenger Financial Service Group of Australia have launched a $1.2 billion (€774 million) private equity infrastructure fund.
The fund will seek investment opportunities in infrastructure segments such as power generation, electricity and gas transportation and railways in the emerging markets, Mitsui said.
Emerging markets present an extraordinary opportunity for investors. Infrastructure assets in emerging markets can provide the same stable cash flow traditionally associated with infrastructure assets in developed countries.
The Emerging Markets Infrastructure Fund will invest globally, though it will focus on deals in the emerging economies of Asia, South America, Africa, Russia and other countries of the CIS, a Mitsui spokeswoman told PERE's sister website PEO.
Japan’s Mizuho Corporate Bank and Access Capital Advisers, an Australian superannuation fund consultant, are strategic investors. The fund already has already raised $175 million in the form of commitments from the sponsors and the two strategic investors.
The fund will be managed by the two sponsors through a joint venture investment management company based out of Singapore. Andrew Jones, a managing director for the fund, said in a statement: “Emerging markets present an extraordinary opportunity for investors. Infrastructure assets in emerging markets can provide the same stable cash flow traditionally associated with infrastructure assets in developed countries.”
Jones added that Mitsui’s deep local networks would allow the fund to have access to attractive deals across various regions.
Masayoshi Hosoya, also a managing director, said: “Mitsui has offices in 69 countries and has been in countries like India, China and Russia for over 100 years. This established network will be utilized to source assets that offer return and risk profiles consistent with the investment criteria for the fund.”
Mitsubishi has owned infrastructure assets in emerging markets for a long time, but this is the first time the company will manage a private equity infrastructure fund, its spokeswoman said.