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Canada-Based Infrastructure Fund Managers – April 2013

by Elliot Bradbrook

  • 30 Apr 2013
  • INF

The Canadian market features some of the largest and most experienced infrastructure investors in the world. Many of these LPs invest in a geographically diverse portfolio of infrastructure assets, and many invest via the direct route as well as through commitments to unlisted funds. However, the Canadian fund manager universe is relatively small. Preqin is currently tracking 14 infrastructure GPs based in Canada, which have closed 12 unlisted infrastructure funds between them, raising an aggregate $7.1bn in investor capital. These fund managers have a further seven funds currently on the road seeking $8bn in fresh commitments.

A significant 64% of Canada-based infrastructure fund managers primarily target opportunities in either Canada specifically or across the wider North American region. The remaining GPs have a broader focus and two firms have exposure to emerging market opportunities; Brookfield Asset Management and Cordiant Capital. Brookfield Infrastructure Fund II is the largest infrastructure fund currently on the road, with a target of $5bn. It is a follow-on fund to the Brookfield Americas Infrastructure Fund, which closed on $2.7bn in 2010 with a more global mandate.

In terms of fund strategy, the vast majority of Canada-based GPs raise primary equity infrastructure funds. Seventy-nine percent of Canada-based fund managers pursue a primary strategy, while 14% raise debt/mezzanine vehicles and a further 7% raise funds which include a mix of equity and debt investments. The most targeted industry sector by Canada-based infrastructure fund managers is energy, with 86% of all GPs making investments in this sector. Renewable energy and utilities assets follow closely, with 79% of Canada-based firms investing in each sector respectively. Other core infrastructure sectors, such as transportation and telecoms, are also significant, with 64% and 50% of Canada-based GPs investing in these industries respectively, while 43% invest in social infrastructure.

Fund manager experience is of growing importance in the infrastructure market, with more investors seeking to invest with fund managers with proven track records. However, there are relatively few experienced fund managers based in the region. A significant 65% of Canada-based GPs manage a single fund, while a further 14% manage two vehicles. Just 21% of Canada-based firms handle three or more infrastructure funds.

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