AT85 Global Mid-Market Infrastructure Income (LON: AT85) is the first investment fund to launch an offer in 2023. The initial issue is 300 million shares at 100p each and that could be topped up with the issue of a further 700 million shares after flotation.
The initial placing and offer for subscription has opened and the subscription closes on 22 February. The expenses will be £6m, so the NAV will be 98p a share. Subsequent issues can happen from 2 March.
Winterflood Securities is the sponsor, while the investment manager is Astatine Advisors LLC, which will receive 1% of the lesser of group NAV and market capitalisation up until £500m – excluding uninvested cash and money invested in related funds. The annual percentage will then reduce as the company gets bigger until it is 0.8% above £1bn. There will be 85% paid in cash and the rest in shares.
The focus is capital growth and increasing dividends. Total return should be 8%-10%/year over the medium-term. Dividends of 5p a share are targeted for 2024. Money can be borrowed but it cannot exceed 25% of gross asset value.
Infrastructure assets
The company will invest in essential infrastructure or infrastructure-related assets – some of which have inflation-linked income. They should have a steady operating record and predictable cashflow. These could be in North America or Europe.
The three main areas are transport and logistics, utilities and digital assets and they will be under the control of the company’s investment manager. There should be a potential exit for these assets. By diversifying between different areas, it reduces the risk of regulatory change in any particular sector. Investments in hydrocarbon-related assets are likely to be avoided.
There are £92.1m of assets that can be acquired once the cash is raised. There are a further £449m of potential acquisitions.
One-fifth of the initial proceeds will be invested in Alinda Infrastructure Fund IV (AF4) as part of a $1bn fund raising by the fund. Investments include air freight Unit Load Device (ULD) leasing company ACL Airshop and AT85 Global may also invest directly. Waste management vehicles provider BTR and Kansas City data network owner Everfast Fiber Networks are other investments.