Target Information

The Golding Infrastructure Co-Investment Fund 2020 enables institutional investors to strategically enhance their existing infrastructure portfolios with attractive co-investment opportunities, primarily in Europe and North America. This investment strategy resonates particularly well with seasoned investors who prioritize swift capital deployment and direct engagement while maintaining a focus on broad diversification. By collaborating with Golding, a leading provider of infrastructure equity opportunities in Europe, investors gain access to a comprehensive deal flow for co-investments. The Munich-based asset manager forecasts a target return of 9-10% net IRR and plans to finalize subscriptions by December 2021.

The fund is designed to offer a geographically and sectorally diversified portfolio of transactions. A first investment has already been executed, as highlighted by Dr. Matthias Reicherter, Managing Director and Chief Investment Officer, who stated, "Our participation in a fiber optic network in Germany, our home market, aligns perfectly with our investment strategy and serves as an excellent foundational portfolio component." The Golding Infrastructure Co-Investment 2020 builds upon its predecessor fund, which was launched by Golding in 2016 as Europe’s first specialized multi-manager co-investment fund and is nearing completion of its portfolio construction.

Industry Overview

The infrastructure industry in Germany has been experiencing a significant growth trajectory, driven by increasing demand for essential services and the push towards digital transformation. The shift towards sustainable infrastructure investments is also gaining momentum, with a growing emphasis on renewable energy projects and smart city initiatives. This aligns well with national objectives aimed at reducing carbon emissions and improving energy efficiency.

Germany's robust legal and regulatory framework has made it an attractive environment for infrastructure investments. High-quality infrastructure, including transportation networks, energy systems, and telecommunication facilities, is critical to supporting the country's economic growth. With a stable economy and a leading position in Europe, Germany continues to attract significant domestic and international investments in infrastructure.

Notably, the impact of the COVID-19 pandemic has accelerated infrastructure spending as governments prioritize revitalizing the economy. This focus has spurred investments in technology, healthcare infrastructure, and green initiatives. Given these dynamics, there is an increasing consensus among investors regarding the necessity of investing in resilient infrastructure that can withstand future challenges.

Overall, the industry outlook remains positive as Germany prepares for a transition to a more sustainable economy, backed by technological advancements and regulatory incentives that promote infrastructure development.

Rationale Behind the Deal

The rationale behind the establishment of the Golding Infrastructure Co-Investment Fund 2020 is grounded in the increasing demand for flexible and diversified investment strategies among institutional investors. The current landscape demonstrates a strong appetite for infrastructure investments characterized by stable returns and lower volatility compared to traditional equities or fixed income.

Furthermore, the fund's focus on co-investment opportunities allows investors to participate directly in selected projects, thus enhancing capital efficiency and leveraging the expertise of established market players. This approach mitigates risks often associated with excessive diversification while enabling targeted investment in high-potential assets.

Investor Information

Golding is a seasoned infrastructure investor with a robust market presence in the field. The firm manages approximately €4.2 billion in infrastructure capital, making it a valued partner for potential co-investments. Jeremy Golding, founder and Managing Director, states, "With around €4.2 billion in managed capital in the infrastructure sector, we have cultivated close ties with outstanding managers over the years, which grants us exceptional access to attractive co-investment opportunities."

Since its inception in infrastructure in 2011, Golding has successfully invested in around 60 primary, secondary, and co-investments, showcasing its expertise and commitment to the asset class. The firm currently oversees various investment programs, including funds of funds, co-investment funds, and managed accounts, catering specifically to institutional investors such as insurers, pension funds, foundations, family offices, and cooperative banks.

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The Golding Infrastructure Co-Investment Fund 2020 appears to be a compelling investment opportunity, particularly for institutional investors looking for targeted exposure to infrastructure. The anticipated net IRR of 9-10% is attractive, especially within the current low-interest-rate environment, where traditional fixed-income investments yield minimal returns.

Moreover, the ability to directly engage in selected projects allows investors to align their portfolios with specific market trends, such as the transition to renewable energy and the growing importance of digital infrastructure. By leveraging Golding's extensive experience and established relationships in the market, the fund is well-positioned to identify and capitalize on lucrative investment opportunities.

However, potential investors should remain cognizant of the inherent risks associated with co-investing, such as project-specific risks and market fluctuations. That said, Golding’s proven track record and deep market insights significantly enhance the likelihood of successful investment outcomes.

In conclusion, the Golding Infrastructure Co-Investment Fund 2020 is strategically aligned with both market trends and investor needs, making it a potentially strong addition to an institutional portfolio focused on infrastructure assets.

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