Aecom eyes outside LPs for new $300 million infastructure/real estate fund

Aecom Technology Corp, a publicly traded provider of technical and management support services with 45,000 employees, in early 2013 launched a $150 million private equity investment fund from its balance sheet, under a new arm of the conglomerate, Aecom Capital.

That fund of one has already committed $100 million to six projects totaling $2.3 billion, including mixed use residential, retail and hotel  projects in Queens, New York, and Jersey City, New Jersey, as well as southern California.

Under John Livingston, chief executive of Aecom Capital, the firm will soon launch Aecom Global Fund II LP with a target of $200 to $300 million for real estate and infrastructure deals.

In an interview with sister magazine Buyouts, Livingston said private equity gives Aecom a seat at the table of big-ticket projects such as apartment complexes, bridge repair, water treatment plants and courthouses as an investor,  Private equity also allows Aecom to offer financing packages and equity investments to its existing stable of customers: real estate developers, corporations and government organizations.

“We now come in on the principal level, not just as a service provider,” he said. “We’re in informal talks with prospective investors and may launch the fund in September.”

While Aecom Capital isn’t planning to challenge giants such as The Blackstone Group or Apollo Global Management, it hopes to sign up one or two large institutional investors for Fund II, which will target up to 10 equity investments of $10 million to $30 million each.

Looking ahead, Livingston said he hopes to raise a series of smaller funds, rather than growing bigger funds. He sees an opportunity for funds to focus on public-private partnerships, or P3 deals, as cash-strapped states, cities and government authorities turn to alternative financing sources for infrastructure projects in order to avoid huge capital costs.

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