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Top 5 largest institutional infrastructure deals of 2016

Modern Investor brings you the top five private infrastructure deals of last year including at least one institutional investor.

Last year, investment in unlisted infrastructure projects around the world reached a record high of $413 billion (€390 billion), alternative assets intelligence provider Preqin has revealed.

The firm’s research showed that in 2016, 1,772 deals were completed for infrastructure assets equalling $413 billion, a rise of 14% from the previous year.

Using Preqin’s original data, Modern Investor presents the top five largest deals of the year including at least one institutional investor.

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5. Red Compartida contract

Deal size: $7 billion (€6.64 billion)

Location: Mexico

Primary industry: Mobile phone networks

Investors: Axtel, CDPQ, CKD-IM, Grupo Multitel, IFC Asset Management Company, International Finance Corporation, Invex, Megacable, Morgan Stanley Infrastructure, Unidentified Investor/s

The Red Compartida project aims to deliver 4G-LTE services to over 90% of Mexico’s population by 2023. The consortium of investors that won the government’s tender includes several Mexican telecom companies, Morgan Stanley Infrastructure Management, as well as a fund set up together by China and Mexico to invest in infrastructure projects, managed by International Finance Corporation, the World Bank’s subsidiary.

The consortium also includes Caisse de dépôt et placement du Québec (CDPQ), the €174 billion pension fund that manages funds for public and parapublic pension and insurance plans in the state of Quebec, Canada.

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4. Port of Melbourne

Deal size: AUD 9.7 billion (€6.75 billion)

Location: Australia

Primary industry: Sea ports

Investors: Future Fund, Global Infrastructure Partners, OMERS, QIC Global Infrastructure

In September, the Lonsdale Consortium, comprising several sovereign wealth funds and pension funds, secured a 50-year lease of the Port of Melbourne, Australia’s largest container, automotive and general cargo port.

The consortium included such institutional investors as OMERS, one of Canada's largest defined benefit pension plans, and the €85 billion Future Fund, Australia’s Sovereign Wealth Fund.

You can read more about the details of the transaction here.

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3. ITC Holdings Corp.

Deal size: $11.3 billion (€10.7 billion)

Location: US

Primary industry: Power distribution

Investors: Fortis Inc., GIC Private Limited

In February, Canada-based utility company Fortis bought ITC Holdings Corp., the largest independent electric transmission company in the US. As part of the deal, Fortis agreed to sell a 19.9% equity interest in ITC Holdings Corp. to GIC, Singapore’s sovereign wealth fund, for $1.23 billion (€1.16 billion) in cash. With this sale, Fortis has completed a significant component of the ITC acquisition financing.

Upon the completion of the deal, Barry Perry, CEO of Fortis, said he was very pleased to be partnering with GIC in the future growth and development of ITC as the SWF has a proven track record in North American infrastructure investing and they shared Fortis’ vision for ITC.

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2. Ausgrid

Deal size: AUD 16 billion (€11.13 billion)

Location: Australia

Primary industry: Power distribution

Investors: AustralianSuper, IFM Investors

In October, a consortium made up of IFM Investors – a fund manager owned by 29 Australian superannuation funds – and AustralianSuper – the lagest pension scheme in Australia – acquired a 50.4% interest in a 99-year lease of Ausgrid from the New South Wales government.

Ausgrid delivers electricity to more than 1.7 million homes and businesses across Sydney, the Central Coast and the Hunter regions, with a network area covering 22,275 square kilometres and including almost 50,000km of below and above-ground electricity cables.

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1. National Grid's gas distribution networks

Deal size: £13.8 billion (€15.9 billion)

Location: United Kingdom

Primary industry: Natural resources pipelines

Investors: Allianz Capital Partners, Amber Infrastructure Group, China Investment Corporation, Dalmore Capital, Hermes Investment Management, Macquarie Infrastructure and Real Assets (MIRA), Qatar Investment Authority

In December, a consortium of infrastructure investors entered into an agreement with the UK’s National Grid to buy a 61% stake in its gas distribution network. Worth €15.9 billion, it was the largest infrastructure deal in the world in 2016.

The consortium comprised Allianz Capital Partners, the sovereign wealth funds of China and Qatar, as well as asset managers, including Hermes and Macquarie.

Read more about this transaction here.

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