Q&A: Andrew Jones, AMP Capital
Copyright © DELINIAN (IJGLOBAL) LIMITED, Company number 15236229, 4 Bouverie Street, London, EC4Y 8AX. Part of the Delinian group. All rights reserved

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
NewsProject Finance

Q&A: Andrew Jones, AMP Capital

qa-jones-web.jpg
AMP Capital raised $1.1 billion for its global Infrastructure Debt Fund II, surpassing its $1 billion target. Many of the same investors from its IDF I returned for a second round. Some investments have already been made, including a $100 million loan to Alterra Power Corp. for the 204 MW Shannon wind project in Clay County, Texas, and the 62 MW Jimmie Creek hydro project in the Toba Valley in British Columbia. PFR Senior Reporter Olivia Feld spoke to Andrew Jones, global head of infrastructure debt at AMP Capital headquarters in Sydney, about investor response to fundraising and what the shop looks for in investments.

PFR: What was the reception like from investors to your second fund?

Jones: As you would imagine we were very pleased with the reception that we got and the results that we achieved. More and more investors are looking to support managers who are able to demonstrate a consistent strategy, delivered over a long period of time. So the fact that this was a follow-on fund I think made our fundraising efforts a bit easier than our first fund that we raised.

We're delighted with the result, we exceeded our target and we were also able to secure a series of investors’ commitments to invest alongside our fund as well, which was very pleasing.

PFR: What sort of assets are you looking at specifically in the Americas?

Jones: The strategy of our fund is to invest in infrastructure businesses. Our core sectors that we target are utilities, so regulated businesses in the gas, water and electricity space as well as transportation assets, airports, roads, these type of assets. In the U.S. we target the same sectors but we found most of our opportunities come from the energy space in one form or another.

PFR: Specifically looking at power, what within the power sector are you interested in?

Jones: We have funded a number of generation assets so both gas-fired generation and renewables. We're interested in taking exposure to transmission assets so transmission lines. And we would also lend to a regulated distribution company.

PFR: Are you looking across the fuel type spectrum in power, from coal down to renewables or do you have a certain appetite?

Jones: We have certainly got appetite for further wind, solar and gas-fired generation opportunities. You know, we are much more cautious in relation to coal-fired opportunities, given the relativity uncertain outlook for the legislation around that fuel source.

PFR: What sort of risk appetite do you look for? Looking at regulated utilities says to me that you like contracted assets so I’d like to hear how you view the space.

Jones: I should have mentioned that the way we get exposure to those assets is through lending at a subordinated or mezzanine level, in the capital structure. So we will lend to companies on a basis that ranks behind their first lien or senior debt in the businesses but obviously ahead of the equity. So our strategy is based on achieving attractive and consistent cash yields, higher than on senior loans, with lower levels of volatility then you'd have from an equity investment.

PFR: What sort of yields are you going to be looking for?

Jones: Our fund targets a return of 10% per annum. And looks to deliver that in the form of a current cash yield.

PFR: In what kind of time frame?

Jones: The investments that we make, the fund itself is a typical 10 year closed end fund-structure. So the loans that we make are for maturities that fit within that term so we’ll generally be lending for seven, eight, nine-years for example. We can't lend beyond the 10-year life of the fund.

PFR: Are you planning to make further investments in Canada, Latin America or is the focus for this fund going to be on North America?

Jones: The mandate of the fund is to pursue these opportunities within the OECD. So in terms of the Americas, Canada is definitely on our radar, as is the mainland U.S. But obviously that limits our opportunities in the Latin American space.

PFR: What sort of returns did you see on the first fund?

Jones: The first fund was also targeting a 10% return, so both of those funds are making investments consistent with that return target. I would say that we've been able to meet the return expectations for investors both in our first and second funds to-date.

PFR: Why do you think so many of the same investors have returned for the second fund?

Jones: It’s not just the consistency of our strategy and our process and our risk appetite but our ability to finance it to meet that criteria and deliver that consistency over the years is one of the key reasons we've had success.


Gift this article