AIMCo, AIIB and BlackRock Back $800 Million Asia Infrastructure Fund
An Asia-focused infrastructure fund has raised $800 million from investors including funds managed by BlackRock Inc. and pension manager Alberta Investment Management Corp., amid renewed interest in the asset class.
Set up by a small Singapore-based private equity firm in 2021, Seraya Partners Fund I has closed above its $750 million target, a statement showed Tuesday. Other investors include insurers, European family offices and sovereign wealth funds from Singapore, South Korea and North America, said James Chern, its managing partner and chief investment officer.
Investors are attracted to the region despite risks like geopolitical tensions as infrastructure deals are trading at about half of US and European valuations, Chern said in an interview. “That’s money on the table,” he said, adding the fund has earned a gross percentage return in “the low 20s” so far.
Seraya Partners, which has about 20 staff, isn’t alone in an area increasingly favored by major investors seeking stability in a time of increased market volatility and high inflation. Singapore wealth fund GIC Pte has grown its global infrastructure team to about 70. KKR & Co. raised about $5.7 billion for its second Asia-Pacific infrastructure fund last year, and Bloomberg News reported in October that Macquarie Asset Management is seeking to raise $4 billion for a new fund with a similar focus.
Chern, an ex-Morgan Stanley banker, still sees a “golden period” of at least a decade with “minimal opposition,” noting there’s just a handful of infrastructure-focused funds in the region, compared to hundreds of its peers focused on areas like property and venture capital. “We are in the same space as real estate and PE funds were 20 years ago in Asia.”
On Tuesday, AIMCo issued a press release stating it welcomed the closing of Seraya Partners fundraising above the US$750M target:
The Alberta Investment Management Corporation (AIMCo) today welcomed the announcement by Singapore-based Seraya Partners that fundraising for their “Seraya Partners Fund 1” has been successfully completed with almost US$800 million raised. AIMCo is an anchor investor, having committed to the Fund in July 2022.
The Fund will focus on making middle market infrastructure investments that will facilitate the energy transition in Asia, including green data centres, offshore wind vessels, and the renewable energy sector.
“AIMCo is excited to support and partner with Seraya to gain exposure to diversified infrastructure investments in the region,” said Jason Munsch, Managing Director, Infrastructure, Head of External Partnerships, who is based in AIMCo’s Singapore office. “This funding commitment is a strong recognition of the growing opportunities for AIMCo’s clients that lie in Asia. It is our strategy to seek to benefit from our partners’ deep regional and sector expertise as we continue to build out capabilities in the region.”
AIMCo officially opened its office in Singapore in September 2023.
About AIMCo
AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than CAN$158 billion of assets under management. AIMCo invests globally on behalf of 17 pension, endowment, insurance, and government funds in the Province of Alberta. AIMCo manages approximately 30 pools of capital on behalf of these clients. With offices in Edmonton, Calgary, Toronto, London, Luxembourg, and Singapore our more than 200 investment professionals bring deep expertise in a range of sectors, geographies, and industries.
Seraya Partners also issued a press release stating it closed its US$800M Asia-Focused Infrastructure Fund for digital infrastructure and energy transition investments:
The fund was oversubscribed and surpassed the target of US$750M
Funds will be used to invest in mid-market opportunities in next-generation infrastructure assets, with an average check size of $100M
Target markets are developed Asia-Pacific markets and Southeast Asia
Seraya Partners has commitments from global institutional investors, including sovereign wealth funds, a multilateral development bank, pension funds, insurers, and family offices across North America, Europe, and Asia-Pacific. LPs include Alberta Investment Management Company (AIMCo), Asian Infrastructure Investment Bank (AIIB), and funds and accounts managed by BlackRock.
Singapore, Tuesday, December 12, 2023 - Seraya Partners, the first Asia-based independent private equity fund for next-generation infrastructure investing, based in Singapore, today announced the completion of its first fund, “Seraya Partners Fund I.” The final close was $800 million, including co-investments, surpassing its $750M target.
The Asia-based and focused Fund invests in next-generation infrastructure, focusing on energy transition and digital infrastructure platforms enabled by tech. The mid-market-focused fund is committed to bolstering the region’s transition to net zero and accelerating the adoption of clean sustainable energy.
“Asia’s rapidly expanding cities, intensifying climate change, and aging infrastructure have created a pressing need to address the region’s burgeoning trillion-dollar infrastructure gap. Energy transition and digital infrastructure will be the twin engines to bridge this gap and lead us toward net-zero ambitions. We are deeply grateful for the support and confidence our investors have placed in us to address the infrastructure gap. We are committed to creating value for our investors while building a more sustainable future for Asia,” said James Chern, Managing Partner and CIO of Seraya Partners.According to the Asian Development Bank (ADB), approximately US$1.7 trillion will have to be invested annually in infrastructure across Asia through 2030 to meet current demand. Seraya identifies supply and demand gaps within the energy transition and digital infrastructure space and has made a solid start to deployment, with 50% of its funds already allocated to the following three platforms:
Empyrion DC is Asia’s first green data centre operator. Empyrion develops and operates highly energy-efficient hyperscale and colocation data centres, and employs renewable energy to power its data centres. Empyrion is operating and developing projects across multiple markets including North and Southeast Asia.
Cyan Renewables is the first pure-play offshore wind farm vessel operator in Asia that owns and leases specialised vessels to support all phases of offshore wind farm projects, from installation to operations. In July 2023, Cyan acquired its first ship in a deal with Belgium’s DEME, including a long-term charter with turbine maker Siemens Gamesa for work offshore Belgium. The platform looks to address the severe shortage of vessels serving offshore wind farms. Cyan aims to own and operate a $1 billion portfolio of vessels by the end of 2025.
Astrid Renew is developing cutting-edge solar, wind, and energy storage solutions in partnership with multinational corporates committed to RE 100 goals, and also local power utilities and regulators.
The Fund has commitments from global institutional investors, including sovereign wealth funds, pension funds, insurers, and family offices across North America, Europe, and Asia-Pacific. LPs include Asian Infrastructure Investment Bank (AIIB), Alberta Investment Management Company (AIMCo), and funds and accounts managed by BlackRock.
The team will continue focusing on building its existing platforms and identifying new investment opportunities in Fund I. Given the large fragmentation and complexity in the Asia infrastructure market, risk allocation issues, and capacity-building challenges, the team taps into its operator experience and sector expertise to play an active role in owning, building, and developing these platforms. The Fund believes this approach will drive attractive returns in the mid to high teens.
“AIIB’s investment in Seraya Partners shows its commitment to support Asian infrastructure asset managers. It is well-aligned with AIIB's mission of financing infrastructure for tomorrow. This investment demonstrates AIIB’s commitment to reducing bottlenecks in the infrastructure supply chain through innovative technologies such as offshore wind farm vessels. AIIB looks forward to working with Seraya Partners to unlock new technologies and new ways to address climate change and to better connect Asia and the world digitally,” said Dong-ik Lee, AIIB Director General, Banking Department (Region 1).
Although details aren't available, I can only assume that AIMCo, BlackRock and the Asian Infrastructure Investment Bank (AIIB) are the anchor investors for this fund and they put at least 50% of the total assets in Seraya Partners Fund I.
In any case, this is an interesting fund with a clear strategy to tackle the Asian infrastructure space:
Seraya's platforms are also worth noting:
Empyrion DC
GREEN DATA CENTER SOLUTIONS
Empyrion DC is Asia's first green data center operator focusing on using renewable energy and hydrogen solutions to power state-of-art next generation data centers. Our footprint stretches from Southeast Asia (Singapore and neighboring countries) to North Asia (South Korea and Japan etc). Our inhouse design and engineering teams have two decades of experience. They are fully equipped to design, build, and operate world-class data center facilities across Asia Pacific.
Investment Date: 2021
Cyan Renewables
OFFSHORE WIND VESSELS
Cyan Renewables is Asia's first offshore wind farm vessel operator. Cyan provides highly specialized vessels to wind farm developers and owners. The Cyan management team based in Singapore and Denmark has an operating track record of servicing more than 10 GW installed capacity of offshore wind projects across more than 2,300 turbines in the past 20 years. Our fleet include existing and new built SOV, CLV, FIV, and WTIV in Europe and Asia.
Investment Date: 2023
Astrid Renew
LOW CARBON ENERGY TRANSITION SOLUTIONS
Astrid Renew is a 100% Seraya owned Energy Transition platform focused on providing renewable energy and energy storage solutions to RE 100 and Fortune 500 multinational corporations transitioning from conventional energy to green renewables and low carbon energy solutions. Astrid is headquartered in Singapore with regional offices across Asia Pacific markets.
Investment Date: 2022
Clearly Seraya's team led by James Chern and his brother Ivan are experienced and knew how to set this fund up properly and where to focus:
One little hitch when you click on individual pictures, it should provide a small biography (maybe it wasn't working on my end).
Anyways, AIMCo has good company in this investment and I'm certain Singapore's GIC and AIIB all know the team at Seraya very well.
Note AIMCo is looking to expand its international investments, especially in infrastructure, and Asia Pacific is where the organization wants to ramp up its operations.
Last September, AIMCo opened its Singapore office headed up by Kevin Bong, Senior Managing Director, Chief Investment Strategist and Head of Singapore:
Mr. Bong is responsible for setting both AIMCo's global investment strategy and its strategic direction for Asia-Pacific. Mr. Bong joined AIMCo from GIC, Singapore's sovereign wealth fund.
To sum it all up, I like the infrastructure opportunities in Asia which Seraya Partners is focusing on and think this fund will deliver solid returns over the long run for AIMCo and other LPs.
One area I do not like in Asia, more specifically in China, is real estate which seems to be imploding by the day, leading to a freefall in China's banking system.
Below, Kyle Bass, Hayman Capital Management founder and CIO, joins 'Squawk Box' to discuss China's real estate crisis, why he believes China is currently experiencing a banking system collapse, what it means politically for Chinese President Xi, potential impact on U.S. companies, and more
If China's banking system implodes, we can expect another wave of deflation to pound risk assets and lower inflation ahead. That's likely another reason why the Fed held rates steady and struck a dovish tone this afternoon.
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