Morgan Stanley and rivals raise billions for infrastructure funds
May 14, 2008, 12:00 am TWN
WASHINGTON -- U.S. investment bank Morgan Stanley said Monday it had raised US$4 billion for a new investment fund that will target large-scale global infrastructure projects.
In a separate announcement, Global Infrastructure Partners (GIP), which was set up by Credit Suisse and U.S. conglomerate General Electric, said it had raised an even larger war chest of US$5.64 billion to support a rival infrastructure investment fund.
Major infrastructure projects have become more attractive to potential investors in
recent months as the U.S. property market remains stuck in a rut and as investors have
become wary of troubled investments such as mortgage-backed securities.
“The successful fund-raising underscores the particular demand for infrastructure investment, and broadly, for alternative assets that generate long-term stable cashflows,” said James Gorman, a Morgan Stanley co-president.
Morgan Stanley said its fund, Morgan Stanley Infrastructure Partners, would invest in big transportation, energy, utility and communications projects around the world.
The fund’s investors include pension funds, insurance companies, and “high net worth individuals,” as well as Morgan Stanley executives, the bank said.
Gorman said Morgan Stanley’s fundraising drive to set up the fund had topped expectations aimed at raising US$2.5 billion.
GIP has already invested in some large scale projects, including London City Airport, port facilities in the United Kingdom and Argentina, and a liquid petroleum product storage facility in India.
The fund recently acquired “a substantial stake” in Biffa Plc., a UK waste management company.
“In these times of extreme market volatility and ever more cautious investment strategies, the size and diversity of GIP’s investor commitment is particularly notable,” said GIP managing partner Adebayo Ogunlesi, a former Credit Suisse investment banker.
GIP targets investments in the energy, transport, water and waste management industries.