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Global infrastructure private deals up 8.9% to US$341 billion in third quarter

By Asia Asset Management  
Oct 30, 2018

Global infrastructure projects continued to draw strong private investor interest in the third quarter with the value of deals up 8.9% year-on-year to US$341 billion despite a decline in their number, according to Inframation Group, which predicts a new record for 2018.

Renewable energy and transportation projects accounted for over half the total value of deals in the three months to September 30.

The actual number of deals dropped 4.7% to 1,153 from 1,210 in the third quarter of 2017, Inframation, which tracks the global infrastructure finance market, says in a report on October 18.

The US was the most active market with $60 billion worth of deals, followed by the UK, Australia, India and Canada, where figures ranged between $22 billion and $29 billion.

The report forecasts the value of total deals this year to exceed $484 billion and mark a new all-time high, erasing the previous record of $467 billion set in 2017.

“This estimate is based on the fourth quarter being the busiest quarter in each of the past four years,” it says.

The largest deal in the third quarter was the $6.69 billion acquisition of phone carrier TDC Group, Denmark’s largest telecommunications company, by three Danish pension funds and Australia’s Macquarie Infrastructure and Real Asset (Macquarie).

New Jersey private equity firm Energy Capital Partners’ $5.60 billion privatisation of Houston power company Calpine Corporation was the second biggest transaction. The third largest was Macquarie’s sale of German global energy service provider Techem GmbH to a consortium led by Swiss asset manager Partners Group Holding for $5.36 billion.

Renewable energy projects such as wind and solar drew the strongest interest with deals worth $93 billion, or 27% of the total. Transportation, especially roads, ports and airports, accounted for another $82 billion or one-quarter of transactions.

Overall, more than half the value of deals, or $161 billion, were financed through loans, 9.5% more than in the third quarter of 2017. But financing from the capital markets fell 21.6% to $29 billion.

Macquarie Group was the top financial adviser for deals in the third quarter and Japan’s MUFG Bank was the top primary lender. Citigroup was the leading bond arranger and UK law firm Clifford Chance was the top legal adviser.