GIP Raising Up To $6 Billion for Second Fund

LONDON (Reuters) – Gatwick airport owner Global Infrastructure Partners (GIP) is preparing to raise a second $5-billion fund, a person familiar with the matter said, braving a still-tough market for infrastructure fundraising.

GIP, the owner of London’s Gatwick and City airports, has already held informal discussions with existing and potential investors about its plans and will kick off fundraising in earnest in the second half of the year, the person said.

If GIP, which has Credit Suisse (CSGN.VX) and General Electric (GE.N) as founders, reaches its target, the new infrastructure fund could be the biggest since the credit crisis peaked.

GIP has invested between $4-4.5 billion of its first $5.64 billion fund, focusing on energy, transport and waste assets such as ports, power stations, and waste management.

The new fund is likely to be of a similar size, the person said — allowing GIP to bid for sizeable assets without lining up a string of partners. However, investors are likely to take a harder line on fees and corporate governance than before the credit crisis, making fundraising slower and more laborious.

GIP declined to comment.

Earlier this year GIP sold stakes in Gatwick to the Abu Dhabi Investment Authority (ADIA), which is the world’s largest sovereign wealth fund, and to South Korea’s National Pension Service, leaving it with a 73 percent stake. Both investors are likely to be contacted over the new fund.

GIP is also likely to bring in a third outside investor into Gatwick in the coming fortnight, the person said, and could later attract a fourth, provided it retains majority control. It is also examining a bond refinancing for the airport.

Infrastructure funds have already raised $11.7 billion this year, more than in all of last year, according to an April 23 report by Preqin, the data provider — although that reflects funds raised over many months.

Fundraising dried up in 2009 as institutional investors, such as pension funds and insurance firms, moved into more liquid assets.

Independent U.S. asset manager Alinda Capital Partners closed its second $4.1 billion infrastructure fund in January, the biggest achieved since the collapse of Lehman Brothers in September 2008.

By Quentin Webb and Simon Meads
(Additional reporting by Greg Roumeliotis in Amsterdam; Editing by Louise Heavens)