Dexia Bank Belgium and GIMV, a Flemish public sector investment bank turned listed private equity firm, have announced plans to launch a new non-listed fund that will focus on infrastructu
Dexia Bank Belgium and GIMV, a Flemish public sector investment bank turned listed private equity firm, have announced plans to launch a new non-listed fund that will focus on infrastructure and real estate construction projects, mainly in the Benelux countries.
The target size for the fund is more than EUR100m, of which Dexia Bank Belgium and GIMV will each contribute 20 percent. The new fund fits in with both parties’ expansion strategy and with a clear interest by institutional investors in this type of investment.
The fund will target infrastructure investments in transport and utilities as well as real estate construction and public-private partnership projects in both partners’ core markets, with a primary focus on the Benelux countries and other areas of northern Europe Continental Europe.
The partners are targeting traditional areas such as water, educational facilities and roads as well as more innovative value-added projects such as renewables and waste management, and will consider both primary and secondary transactions with an enterprise value of at least EUR20m, with an emphasis on the self-originated projects. The minimum equity or equity-linked investment over the investment’s lifespan is expected to amount to EUR5m.
Dexia is a top 10 player worldwide in project finance for utilities, construction and infrastructure, the global leader in public-private partnerships and has experience of structuring debt-linked instruments including bonds, loans with credit enhancement, project finance, and securitisation for the public sector
Founded in 1980 by the Flanders regional government but listed on the Brussels Stock Exchange since 1997, GIMV is Belgium’s largest private equity firm and has grown into a major European and international player with a long track record in the asset class.
Dexia and GIMV believe the current market dynamics for infrastructure and construction projects are very favourable and that the future deal-flow in the markets they are targeted will be substantial. The five-strong investment team, to be headed by a managing partner with a broad international experience in public-private partnership transactions, is due to be in place by September.
‘We decided last year to expand our European business in terms of both geographical regions and activities,’ says GIMV chief executive Dirk Boogmans. ‘We have already launched initiatives such as the expansion of our IT and communications team into France, and the establishment of a new clean technology business unit and our related collaboration with Emerald Technology Partners.
‘The announcement of the infrastructure and real estate construction fund marks a new step in the implementation of our strategy. The private equity knowledge and track record of GIMV combined with Dexia’s expertise in the financing of public sector institutions and local authorities as well as its wide network should give the fund a unique position in the market. We have already identified a clear appetite from established institutional investors for an investment with this type of risk/return perspective.’
‘Dexia is constantly looking to improve its range of solutions for the evolving needs of the public authorities,’ says Dirk Gyselinck, a member of the management committee of Dexia Bank Belgium. ‘As public-private partnerships become available to them, Dexia will also offer a solution for the equity portion. Demonstrating the value of this financing technique will enhance Dexia’s existing partnerships with its core clients.
‘As a market leader in public-sector financing, Dexia is well placed in terms of deal sourcing capacity. So far the Benelux infrastructure sector is still uncharted territory in terms of equity investments for the bank. The initiative also fits well strategically with the bank’s profile in terms of risk and return, and we are convinced it will be appreciated by our key customers. We are pleased to have a highly-regarded hands-on private equity player such as GIMV as a joint sponsor.’
