Alinda Capital Partners, a middle-market infrastructure investment manager, today announced its intention to raise £350m through the initial public offering (IPO) of a newly created closed-end investment trust called Alinda Capital Infrastructure Investments, with one of its key sectors for exposure being digital infrastructure.
Alinda Capital Infrastructure is launching its initial public offering (IPO) on the London Stock Exchange after releasing its Intention to Float. The new vehicle will invest primarily in core plus, middle-market infrastructure. Geographically, Alinda Capital Infrastructure will invest at least 80% of gross asset value (GAV) in the United States, Canada, the United Kingdom, and the European Economic Area (EEA). Specifically, the firm’s three key sectors of infrastructure, which will comprise at least 90% of GAV, are digital, transport & logistics, and utility-related.
Alinda Capital Infrastructure is pursuing a capital raise of £350m, through the issuance of 350 million shares at a price of 100 pence per share. Additionally, if aggregate demand exceeds the company’s initial target, Alinda may upsize its IPO, raising up to £500m. Assuming the firm meets its initial target of £350m in gross proceeds, the net proceeds raised from the issuance will amount to £343m, after fees and expenses of £7m.
In terms of timing, Alinda Capital Infrastructure expects to publish an IPO prospectus during the week commencing October 25th and complete its IPO in late November 2021. Finally, Peel Hunt is acting as financial advisor and joint bookrunner to Alinda Capital Infrastructure, alongside Numis as joint bookrunner.
Dgtl Infra highlights Alinda Capital Infrastructure as another permanent capital vehicle, with a focus on digital infrastructure, targeting a listing on the London Stock Exchange. Indeed, today’s announcement closely follows Pantheon Infrastructure’s proposed IPO, as well as earlier 2021 listings, from Digital 9 and Cordiant.
Investment Profile and Strategy – Alinda Capital Infrastructure
Alinda Capital Infrastructure intends to invest both directly, as well as indirectly, through co-investments, alongside Alinda Capital Partners (see below) and third-party fund managers. In terms of size, the firm’s mid-market infrastructure approach will target equity investments of up to £200m, in infrastructure assets or companies, with an enterprise value of up to £1bn.
Alinda Capital Infrastructure is targeting total returns on Net Asset Value (NAV) of between 10% and 12% per year, over the medium-term, following the full investment of its initial public offering (IPO) net proceeds. As part of this total return, the firm targets an initial dividend yield of 3.5% for the year ending 2022. Subsequently, this will rise to 5% for the year ending 2023, and, thereafter, a progressive dividend.
Alinda Capital Infrastructure has identified a pipeline of investment opportunities, within its three key sectors of infrastructure, which comprise a total equity opportunity of $660m (£485m).
Post-IPO, Alinda Capital Infrastructure expects to commit over £200m of equity within three months. Subsequently, within 18 to 24 months following its IPO, Alinda expects a total equity deployment opportunity of £500m to £600m.
Co-Investment, LP Commitment, Related Party Transactions
Alinda Capital Infrastructure will be a significant limited partner (LP) in Alinda Infrastructure Fund IV, the flagship private equity fund of Alinda Capital Partners. Additionally, Alinda Capital Infrastructure may invest alongside other of Alinda Capital Partners’ funds as a consortium, or as a co-investor.
Limited Partner (LP) Commitment
Alinda Capital Infrastructure has committed to invest into Alinda Infrastructure Fund IV the lesser of i) £150m and ii) 50% of the remaining net initial proceeds, through a limited partner (LP) commitment. Notably, this commitment would be drawn down over a period of several years.
Related Party Transactions
Also, Alinda Capital Infrastructure may acquire investments from, and dispose of investments to, funds managed by Alinda Capital Partners.
Alinda Capital Partners – Investment Manager Post-IPO
Alinda Capital Partners, headquartered in Greenwich, Connecticut, has deployed $12.5bn of equity over a 15-year time period. Since inception, Alinda has invested in 30 infrastructure businesses in the United States, Canada, and Europe.
Middle-Market Track Record
From February 2014, through June 30, 2021, Alinda Capital Partners has deployed almost $3bn through 17 mid-market infrastructure investments. Specifically, these mid-market investments were made across the following infrastructure sectors:
- Transportation: 42% of capital invested
- Digital: 39% of capital invested
- Utility-Related: 11% of capital invested
- Mid-Stream: 8% of capital invested
Geographically, Alinda Capital Partners’ investments have been 50% in North America, 17% in the UK, and 33% in continental Europe. Finally, Alinda’s middle-market track record to June 30, 2021, has delivered a gross IRR of 19.3% and a 1.8x gross multiple on invested capital (MOIC).
Alinda Capital Partners has invested in the digital infrastructure sub-sectors of towers, data centers, and fiber. Particularly, the firm’s current digital infrastructure investments include a joint venture with QTS Realty Trust, Glide Group, and EmiTel.
- QTS JV: 50%/50% joint venture owning QTS’ Manassas (DC-1) data center, with an expected stabilized value upon completion of $240m
- Glide Group: UK provider of broadband, networks, and utilities for student accommodation, house-sharers, and small- and medium-sized enterprises
- EmiTel: owns 350 broadcast towers in Poland to distribute television and radio signals nationwide for television and radio broadcasters
Post-IPO, Alinda Capital Infrastructure will be led by Andrew Bishop, a Managing Partner of Alinda Capital Partners. Also, Chris Beale will be Chairman, who is similarly the founder and Chairman of Alinda Capital Partners.
Andrew Bishop – Managing Partner
Andrew Bishop is joint Managing Partner of Alinda Capital Partners. He is also Head of Investor Solutions, responsible for client relationships, co-investor partnerships, and new product development. Bishop is a member of the investment committees of Alinda’s funds.
Prior to Alinda, he was a Managing Director in Goldman Sachs’ power, utilities, and infrastructure investment banking group in London. Bishop previously worked at Morgan Stanley, Deutsche Bank, and PwC in London.
Chris Beale – Chairman
Chris Beale founded Alinda in 2005 and is executive chairman of the firm. He is also a member of the investment committees of Alinda’s funds. Prior to founding Alinda, Beale led the infrastructure finance business at Citigroup. He also led the infrastructure businesses of Morgan Stanley and First Boston (now Credit Suisse) in New York.