DIF has agreed to sell its portfolio of asset held by its 2008-vintage DIF Infrastructure II fund to APG Asset Management NV. The secondary transaction is valued at more than 700 million euros ($797.2 million), a source said. The transaction comprises 48 PPP / PFI and renewable energy assets across Continental Europe and the UK. Campbell Lutyens provided financial advice to DIF, while Loyens & Loeff was their legal adviser.
13 July 2017 – DIF is pleased to announce that it has signed an agreement to sell the entire portfolio of assets held by its 2008-vintage DIF Infrastructure II fund (“DIF II” or “Fund”) to APG Asset Management N.V., acting on behalf of pension fund ABP (“APG”). The transaction comprises 48 PPP / PFI and renewable energy assets across Continental Europe and the UK.
DIF II was launched in October 2008 with a 10-year life to invest in infrastructure projects that offer long-term stable cash flows and an attractive return. The Fund reached a final closing in July 2010, with €572 million of committed capital and made 58 investments; of which 10 investments have already been realized. The remaining portfolio includes investments in hospitals, schools, government accommodation, roads, solar and wind projects.
With the end of the Fund’s term in 2018, DIF considered the potential alternatives for realising the portfolio and ultimately concluded that value would be maximised by launching a process for the sale of the portfolio as a whole or in parts, if preferred by bidders. The bidding process also enabled institutional investors to bid for a share in the portfolio and to elect for an optional agreement with DIF to continue to manage the portfolio. This transaction structure also allowed DIF Infrastructure III (“DIF III”) to sell its cross-shareholdings in 12 of the portfolio assets. DIF mandated Campbell Lutyens and Loyens & Loeff as financial and legal advisors, respectively.
Following a competitive bidding process, APG was selected as the preferred bidder for the acquisition of the whole portfolio of DIF II and the cross-shareholdings of DIF III. As part of its bid, APG requested DIF to continue to manage the portfolio through a new investment vehicle, with a term of 25 years.
Wim Blaasse, Managing Partner of DIF said: “We are very pleased to have agreed this transaction with APG. It generates an excellent result for the DIF II investors, well above the Fund’s target return at inception, and will allow the Fund to be fully realised within its contractual life. The successful exit is a strong endorsement of DIF’s strategy and approach, as well as the commitment of the DIF team”
Immanuel Rubin, Partner at Campbell Lutyens said: “This is one of the largest infrastructure portfolio transactions in over five years, following a trend of high-quality managers using portfolio transactions to successfully exit their holdings.”
The transaction, which is subject to EC anti-trust approval, is expected to close in Q3 2017.
DIF is an independent and specialist fund management company, managing funds of approximately €4.2 billion across seven closed-end investment funds and several co-investment vehicles. DIF invests in the global infrastructure market through two differentiated and complementary strategies.
The majority of DIF’s funds target PPP / PFI / P3, regulated infrastructure assets and renewable energy projects in Europe, North America and Australasia.
DIF CIF I targets small to mid-sized infrastructure assets in the telecom infrastructure, rail, energy and utility sectors that generate stable and predictable cash flows that are contracted over the mid-term with highly rated entities. The fund targets both greenfield and operational projects in Europe, North America and Australasia.
DIF has offices in Amsterdam, Frankfurt, London, Paris, Luxembourg, Madrid, Toronto and Sydney.
About APG Asset Management N.V.
APG Group (“APG”) carries out collective pension schemes for participants in a broad range of sectors including in education, government, energy and utility companies, construction sectors and housing corporations. APG manages pension assets of in total €452 billion (May 2017) on behalf of pension funds for these sectors. APG works for over 40,000 employers and provides for the income of around 4.5 million participants. APG administers over 30% of all collective pension schemes in the Netherlands and has offices in Heerlen, Amsterdam, New York and Hong Kong.
On behalf of its clients (all of which are Dutch pension funds) APG Asset Management N.V. – a 100% subsidiary of APG Group – and its predecessors have been an active infrastructure investor since 2004, investing in excess of €10 billion to date, both through infrastructure funds as well as co-investments and direct investments with a long term investment horizon. The current portfolio encompasses almost 50 investments.