Tipping the scales

For the first time, IPE Real Estate has compiled a ranking of the 50 largest infrastructure investment managers. It is a list to watch over the coming years as the asset class inevitably grows.

There are some very large constituents – the top three manage close to $200bn in infrastructure assets when combined – but the ranking is nowhere near as deep as its equivalent in real estate. There are only 11 infrastructure managers with more than $10bn in AUM. By contrast, IPE Real Estate’s latest Top 100 investment management survey showed there were nearly 70 companies with such scale.

Blackstone is not on the list this year, but judging by its recent overtures to create a $40bn infrastructure business, it could well be next year. The Public Investment Fund of Saudi Arabia has committed $20bn to what Blackstone hopes to be a fund with $40bn of equity.

The focus is going to be on US infrastructure where Blackstone and others are anticipating opportunities. Whether the US government will be able to lay the foundations for a golden age of infrastructure investment remains to be seen. But Blackstone – and Saudi Arabia – certainly appear to be betting on it.

Blackstone did have an infrastructure business, but the management team left to create Stonepeak Infrastructure Partners (number 17 on our list) several years ago. In the meantime, real estate has become Blackstone’s largest business segment, outgrowing its traditional private equity activities, for which it is best known.

Blackstone’s strategy is invariably about producing scale, hence its ambitions to become big in infrastructure quickly. A prime example is its European logistics platform Logicor, which it created in recent years by aggregating various assets and portfolios. It is now selling the entire entity for €12.25bn to China Investment Corporation (CIC).

That sale is not only interesting for the fact that it shows there is a voracious appetite for logistics among institutional investors. It also demonstrates that Chinese investors – at least some – can still make big overseas deals.

The Chinese government has been looking to restrict capital outflows from its domestic investors. It is having an impact on the capital markets, but don’t expect Chinese investors to disappear from the stage.

CIC is reportedly also looking to support a Chinese consortium hoping to buy the Singapore-listed Global Logistic Properties. A deal would be worth upwards of US$8bn.

CIC is also one of Germany’s largest residential landlords, following its purchase last December of the Australian-owned BGP Investment for €1.17bn. From page 38, we look at the growing love affair between global housing markets and large institutional investors.

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