UBS launches infra debt platform

http://www.efinancialnews.com/story/2013-10-18/ubs-launches-infra-debt-platform

UBS launches infra debt platform
Sarah Krouse in Manchester

18 Oct 2013

UBS Global Asset Management has made its first push into infrastructure debt, with the unveiling of a new platform seven months after appointing a senior investment banking executive to spearhead the move.

It will invest in a variety of different types of infrastructure debt, ranging from senior loans to subordinated debt, and target deals of about $100 million.

In March this year, Financial News revealed that Tommaso Albanese, vice-chairman of global capital markets at UBS Investment Bank who worked in infrastructure finance, would lead a new infrastructure initiative for the asset management division.

The bank’s infrastructure and private equity business currently manages more than $11 billion in investments, of which about $2 billion is in direct infrastructure investments.

The asset management infrastructure debt business is targeting returns of about 5% to 6%. Deals will include brownfield and greenfield projects as well as secondary market transactions.

Albanese stressed the importance of investors not taking a too narrow approach when investing in the sector. He said: “Above all, investors must be flexible across all debt instruments.”

He also highlighted a “market dislocation”, in which there is a supply of projects in need of financing but few banks willing to lend to the extent that they did before the financial crisis.
Albanese added: “The moment is now and there is potential to capture the first-mover advantage.”

Other fund managers active in infrastructure debt include BlackRock, AMP Capital and Allianz Global Investors, which launched a platform in June 2012 when it hired a team of five from Trifinium Advisors, a subsidiary of US insurer MBIA. The asset class has increasingly caught the attention of institutional investors for its long-term nature and inflation-adjusted returns.

http://www.efinancialnews.com/story/2013-10-18/ubs-launches-infra-debt-platform