Gatwick firm eyes second buyout fund

City A.M. Reporter
GATWICK airport owner Global Infrastructure Partners is understood to be preparing to raise a second $5bn (£3.4bn) fund, braving a still-tough market for infrastructure fundraising.

GIP, which also owns London City airport, is thought to have held informal discussions with existing and potential investors about its plans and will kick off fundraising in earnest in the second half of the year.

If GIP, which has Credit Suisse and General Electric as founders, reaches its target, the new infrastructure fund could be the biggest since the credit crisis peaked.

GIP has invested between $4bn to $4.5bn of its first $5.64bn fund, focusing on energy, transport and waste assets such as ports, power stations, and waste management. The new fund is likely to be of a similar size, the person said – allowing GIP to bid for sizeable assets without lining up a string of partners. However, investors are likely to take a harder line on fees and corporate governance than before the credit crisis, making fundraising slower and more laborious.

GIP declined to comment.

Earlier this year GIP sold stakes in Gatwick to the Abu Dhabi Investment Authority and to South Korea’s National Pension Service.

GIP is also likely to bring in a third outside investor into Gatwick in the coming fortnight, the person said, and could later attract a fourth, provided it retains majority control. It is also examining a bond refinancing for the airport.

Infrastructure funds have already raised $11.7bn this year, more than the whole of last year, according to an April report by Preqin, the data provider -- although that reflects funds raised over many months.

Fundraising dried up in 2009 as institutional investors, such as pension funds and insurance firms, moved into more liquid assets.

Independent US asset manager Alinda Capital Partners closed its second $4.1bn infrastructure fund in January, the biggest since the collapse of Lehman Brothers in 2008.