The Bilfinger Berger Global Infrastructure Sicav raised £212m and closed its IPO on 14 December. Its first day of trading on the London Stock Exchange is scheduled to be 21 December.
The fund will target an annual income of 5.5% net of fees that it intends to increase progressively over the long term through returns on a number of infrastructure projects that have already been built and are in operation.
Bilfinger Berger is a German engineering company that builds and administers long-term infrastructure projects globally, many of which are government-backed. A total of 19 projects will be within the closed-ended proposition and include the Golden Ears Bridge in Canada, the M80 motorway in central Scotland, the Royal Women’s Hospital in Australia, Burg Prison in Germany and a number of schools in the UK.
They are all in investment-grade quality countries, exemplified by the original IPO including a road in Hungary but when the country’s debt was downgraded the road was removed from the fund.
Caroline Shaw is an investment manager at Courtiers that successfully received an allocation of shares worth £6.1m (from an original application of £7.25m) and will use the investment across her balanced and cautious portfolios.
The opportunity is attractive to her because, as she says: “With interest rates so low, I can’t really warrant giving money to the government at 3.2% for the next 30 years.
”The managers are very closely aligned with the fund as two-thirds of their remuneration depends on whether or not they generate the 5.5% per year income.”
She also likes the relative security of projects that are government-backed and their long-term nature that matches the income requirements of some of her clients.
“They also have access to a pipeline of [currently eight] investments from Bilfinger Berger and the fund has the right to make an offer to the company for those projects,” she added.
