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Former JPM infrastructure exec starts alliance, draws CalSTRS — Reuters

(Reuters) – JPMorgan’s former OECD Infrastructure Investment Fund Chief Investment Officer is starting an infrastructure alliance and has secured $500 million of commitments from investors including Californian pension giant CalSTRS, the partnership said on Tuesday.

The investment manager, named Argo Infrastructure Partners, is founded by Jason Zibarras who left JPMorgan in 2013. It will initially focus on low-risk investments in energy infrastructure in Canada and the United States, including midstream, utilities and contracted power assets and will target “really high grade low-risk assets,” Zibarras said.

Argo said in a statement that it has secured commitments from investors including the California State Teachers’ Retirement System (CalSTRS) and has received a strategic investment from Dallas-based investment office Crow Holdings, controlled by descendants of the family of late real estate developer Trammell Crow.

“The (Argo) alliance offers CalSTRS an opportunity to construct a diverse portfolio of investments in North America,” said CalSTRS spokesman Michael Sicilia, who added that CalSTRS invested $250 million in Argo.

CalSTRS started investing in infrastructure in 2010 in order to diversify its portfolio and had $1.3 billion of its $190 billion portfolio committed to infrastructure globally as of 2014, Sicilia said.

Infrastructure funds have been increasingly sought out by investors including pension funds that are attracted to safer assets, which offer higher yields than bonds, while there is a constant need for many states and cities to upgrade transport and building facilities.

Zibarras said the partnership he has founded differs from traditional infrastructure investment funds both in terms of the way it is set up and the fees it charges. The total cost of fees plus expenses will be significantly lower than traditional institutionally managed funds, Zibarras said.

“Traditional infrastructure funds are developed and packaged and sold to investors, whereas here, we worked in partnership with our initial investors to design the focus of the investment target strategy, as well as a number of key features to increase transparency,” Zibarras said.

Zibarras expects to have one or two further large institutional investors in the alliance, which has reached its first “close” with the $500 million committed.

Crow Holdings could not be reached for comment.