Bouwfonds Investment Management has launched Bouwfonds Communication Infrastructure Fund II, a new infrastructure fund for institutional investors.
“We are offering institutional investors in Germany the opportunity for the first time to take a stake in the expansion of the country’s telecommunication infrastructure and thereby safeguard Germany’s sustainability,” says Jaap Gillis, CEO at Bouwfonds IM.
The Bouwfonds Communication Infrastructure Fund II aims to invest between €500 million ($543.8 million) and €600 million ($652.6 million) in “passive telecommunication infrastructure”, such as fiber optic networks. The proportion of debt financing is around 50 percent.
“The fund focuses on regional and local access networks in Germany in areas that are currently underserved and have sufficient size and population density,” says Bas van Dongen, managing director communication infrastructure Germany of Bouwfonds.
Investments will primarily be made in fixed-line networks, with a smaller share of the fund’s assets being invested in communication towers and data centers.
“More than 80 percent of the fund volume is targeted for investment in German infrastructure, primarily in areas lacking sufficient broadband coverage,” says Dr. Peter Selgert, director asset management at Bouwfonds IM. “The fund focuses on the long-term letting and leasing of fixed-line networks, communication towers and data centers, which together constitute the so-called passive level of the communication infrastructure,” says Selgert.
In an initial closing, approximately €100 million ($108.8 million) was raised among leading insurance companies and pension funds. The overall target of the fund is to raise up to €300 million ($326.3 million) in equity commitments.
The fund is structured as a Luxembourg Limited Partnership. Warburg Invest Luxembourg will act as fund service provider, while M.M. Warburg & Co. Luxembourg will act as custodian for the fund.
The new fund is open to institutional investors for a minimum investment of €10 million ($10.9 million) and a distribution yield of 5.5 percent to 6.5 percent per year as indicated. Bouwfonds IM expects to make the first investments shortly.
Bouwfonds IM, the real asset investment management division of Rabo Real Estate Group, launched its first communication infrastructure fund in the Netherlands in 2008 and has since built up an experienced infrastructure team in Germany also. For the telecommunication infrastructure segment, it currently has assets under management worth about €800 million ($870 million).