Dutch pension fund manager APG Asset Management and the Ajay Piramal-led Piramal Enterprises are looking to raise a second fund to invest in infrastructure projects in India, said sources.
The aim is to raise $500 million (nearly Rs 3,500 crore), they added. In 2014, the two entities announced a joint corpus of $750 million in the first round of fund raising and have invested most of that corpus, said the sources. “Since the first fund is getting over, they are looking for a second fund,” was the explanation.
An APG spokesperson declined to comment. A Piramal spokesperson said: “We do not comment on market speculation.”
When the duo announced the alliance, they planned to invest in rupee-denominated mezzanine instruments issued by infrastructure companies in India, with a target investment of $1 billion over three years. Piramal and APG had each initially committed $375 million for investment under the JV.
In 2016, Piramal and APG had invested $132 million (Rs 900 crore) in Essel Infrastructure’s solar energy platform across the country. In 2017, the partners invested $297 million in renewable power producer Mytrah Energy. Reportedly, most of the proceeds were used to purchase the interest of current shareholders, such as Apollo Global Management, AION, Goldman Sachs, Bank of America Merrill Lynch and IDFC Alternatives.
Macquarie, IDFC and AION have launched infrastructure funds in the past but not many fund managers have launched a new fund for the segment in recent years. Piramal has, apart from APG, forged other JVs with global fund managers. One is with Bain Capital Credit, to invest in distressed assets and special situations. And, a fund with CPPIB to invest in residential projects. It also formed a JV with Ivanhoe Cambridge, a unit of CDPQ, to give equity for real estate developers. APG Asset Management is one of the largest pension fund managers in the world. As on January, it managed $482 billion in assets.
In 2016, APG formed a $450-million JV with Xander Group for retail assets in India. It is also a cornerstone investor in Godrej Build to Core-I, a commercial property fund of Godrej Fund Management.