The private equity firm has found infrastructure’s sweet spot, and investors have taken notice. Danielle Myles reports on Euronext Paris’s biggest listing of the year.
Time and time again, crises have breathed new life into infrastructure as an investment proposition. More than a decade ago, the global financial crisis spurred investor interest in its stable, if not spectacular, returns. Today, digital and physical infrastructure underpin governments’ Covid-19 recovery plans.
One player to understand the asset class’s full potential is Antin Infrastructure Partners. Since opening its doors in Paris in 2007, the independent private equity firm has viewed infrastructure as an opportunity to invest in businesses that tackle growing societal issues. “Infrastructure for us is not a sector, but a certain type of risk profile,” says Mélanie Biessy, senior partner and the firm’s chief operating officer. “We see ourselves providing a vital societal role, providing capital and expertise to deliver an essential long-term service.”
This approach saw the firm make early investments in projects not initially considered infrastructure, such as fibre optics, telecom towers and social sectors. It also laid the foundations for its September 2021 initial public offering (IPO) on Euronext Paris which, as of mid-November, is the exchange’s biggest listing of the year.
Intense asset management
Antin has differentiated itself from traditional infrastructure investors by actively and methodically developing its portfolio assets. “When we started the business in 2007, most of our peers were thinking about infrastructure as a core business with downside protection, but not a lot of upside,” says Ms Biessy. “We felt we could extract high returns from infrastructure assets, and we’ve demonstrated that we were right.” Across its 12 exits, Antin has realised a 24% internal rate of return and 2.7-times exit multiples. “There are more exits to come that are in this spectrum,” she adds.
We are absolutely clear and conscious of the fact that there is huge growth in front of us
This investment performance has helped it raise €20bn since inception and allowed its founders to entertain the possibility of a successful IPO. BNP Paribas was a passive minority shareholder in the firm until the end of 2012, but since then Antin’s partners have owned the business outright. Even during those early years, going public was never far from their mind.
“Since the beginning, we have been thinking about the firm’s continuity beyond the founders and for the second and third generation of partners,” says Ms Biessy. “It’s been a recurring theme and we needed to find a solution that addressed several strategic aims.” Those aims were to help with succession planning, attract and retain talent, and fund growth plans at a time when infrastructure is being prioritised by policy-makers around the world.
Running the boat
Antin’s leadership started to seriously consider an IPO towards the end of 2019, and thanks to infrastructure’s resilience throughout the downturn, its plans were not derailed by the pandemic. Lead bookrunners JPMorgan and Morgan Stanley worked on the deal since autumn 2020 while Citi, Bank of America and BNP Paribas were appointed junior bookrunners later down the track.
While the firm’s origins are in France, its London office has grown over the years to become just as big. This meant that both locations were candidates for listing venues. “We ultimately decided for Paris, but either would have been a good fit,” says Ms Biessy. Antin decided to float 15% of its shares. “We wanted to get adequate additional capital, but at the same time continue to be independent and run the boat,” she explains.
After holding a virtual roadshow from September 15 to 23, the firm listed on Euronext Paris on the morning of September 24. At €24 per share, it priced at the top if its range and has since consistently traded above €28. The deal valued the firm at €4.1bn and raised a total of €632.5m, of which primary proceeds accounted for €402m. Fittingly, Antin’s new owners are predominantly blue-chip, long-only investors. “We are very pleased to have high-quality shareholders that take this long-term view that we also take,” says Ms Biessy.
Huge growth ahead
The IPO proceeds will help Antin further scale up its business by, among other things, expanding into new geographies. In addition to its strongholds in Paris and London, the firm has a presence in New York and Luxembourg and is establishing an office in Singapore to be closer to its Asia-based investors. The capital injection also allows Antin to launch new strategies that build on its four existing funds, including its mid-cap fund which closed in June.
Between infrastructure’s perennial investment gap and its rates of returns now exceeding those in other private equity markets, Antin will face no shortage of opportunities to use its newfound capital. “We are absolutely clear and conscious of the fact that there is huge growth in front of us,” says Ms Biessy. “And that we will be there to fund it.”
