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SCMP Reporter

PEREGRINE Investments' Asian Infrastructure Fund has raised US$500 million (about HK$3.86 billion), the largest private placement by an Asian-based fund.

   The fund is targeted at non-listed equity or equity-linked securities involved in infrastructure projects across Asia and its initial success is likely to encourage similar big fund placements.

   Fears of an investment cap on China energy projects were also dispelled, with the company saying that senior Chinese officials had reassured them that returns would be linked to efficiency and tariffs.

   The 10-year fund, which has a minimum investment of $5 million, has attracted investors ranging from United States pension funds to the World Bank's private equity unit.

   It will mainly focus on achieving long-term capital growth - initially estimated at about 25 per cent - from power, transport and telecommunications projects.

   Leading investors include the International Finance Corp with $50 million, the Asian Development Bank with $20 million and investors affiliated with George Soros with about $65 million.

  Peregrine said it had made an initial investment of $20 million.

   The average investment is between $25 million and $30 million.

 'We have not gone out to raise money and then wonder how to invest it. We have put together one of the most professional teams to manage this business,' said chairman Philip Tose.

   'Infrastructure is going to be one of the most exciting areas in Asia we will see over the next 10 to 15 years.'    Will Liley, managing director of the fund, said: 'This is the first time an Asian-based company has raised this sort of money.

   'The only way we will get the money back is if the ventures into which we are investing work.

   'It is a very simple principle, what we do is invest alongside local partners.'    He said the overall return was expected to be more than 25 per cent a year, even though individual project rates would vary depending on the stage and level of investment.

   The company would not disclose the breakdown of countries and sectors other than disclose that it was already committed to four investments of more than $175 million in toll roads in China, a power venture in India and in FLAG, a multinational telecommunications venture.

  Three other projects totalling about $150 million to $225 million are in final due diligence.

   Transportation is likely to account for 40 per cent, with the remaining capital split between power and telecommunications.

   About 25 per cent could be allocated to companies about to make an initial public offering.

  The fund will be a subscriber shareholder for $50 million in each of Consolidated Electric Power Asia (CEPA) and new private power companies in Indonesia, Pakistan and India.

   CEPA is controlled by Gordon Wu Ying-sheung's Hopewell Holdings and is the largest independent power producer in Asia.

   The listing on the Dublin stock exchange is to satisfy the charter requirements of institutional investors.

  'Anybody who sold the shares in the first two years would be foolish,' Mr Liley said.

   Fears that investment returns in China power plants would be capped at 15 per cent could be misplaced, he said.

       Mr Liley, quoting 'good contacts at the most senior level', said authorities would be focusing on tariffs and capacity rather than investment rates.



Peregrine raises US$500m