Halocline is an expert in considering both direct and indirect infrastructure secondaries. We have looked at since 2005 some of the premier secondary direct, direct, and private fund interests and have a sound understanding of the asset class from our partners.
We have a proven history in selecting pricing all range of infrastructure managers as well as completing secondary fund interests and secondary direct transactions globally. We are able to apply our expertise in this evolving asset class where we expect to see secondary deal volumes increasing over the next few years as assets in private funds mature. Given our expertise we have looked at secondary investments in Canada, U.S, Latin America, Europe, Australia, and Asia. Our team includes dedicated infrastructure experts who combine considerable experience in infrastructure both at a fund and at a secondary direct level.
Halocline’s strategy for considering secondary infrastructure is focused on secondaries and secondary direct with the aim of generating stable and inflation-linked returns with strong downside protection. As in the case of considering investments in private equity secondaries, diversification is a key component to our approach both for single interests and portfolios of infrastructure managers and also for portfolios of secondary direct infrastructure. We diversify by:
Halocline’s investment strategy targets secondary investments and secondary direct portfolios, offering the potential to diversify investments into prior vintage years and select the best underlying assets and attractive multiples in all market conditions. We are quality driven not necessarily discount only driven. This strategy is supplemented by the selective commitment to remain open minded when considering primary fund investments that are stapled alongside secondary sales of limited partner interests on a case by case and strategic basis.
We focus on managers with a range of investment styles and strategies with a proven track record. In addition to Core Plus managers that apply a value enhancement or activist investment approach, we also target Core managers by targeting a combination of managers, aiming to create an attractive mix of yield and growth.
When considering secondary direct investments we target a range of industry sectors including:
When considering secondary limited partner interests in infrastructure funds, we like to spread risk across market cycles in order to avoid over-committing capital in periods when asset valuations are high. Given a number of managers who began fund-raising in the years since 2004 leading up to the recent market turmoil in 2008, we have considering typically tail end funds who have had difficulties in exits or other macro-economic problems. Our “sweet spot” for committed capital has typically been 2-4 years, but for secondary direct investments we can as a unique investor work with our funding partners to hold assets to term 20-30 years alongside premier pension and insurance limited partners. This is typically a very unique position for any family office to be able to invest in such broad investment horizons since our aim is to preserve our balance sheet and capital base via stable long-term GDP linked investments.
We are primarily focused on opportunities in mature operating and cash flow generative assets as well as existing assets with refurbishment needs (“brownfield”). For secondary fund interests we are largely concentrating on managers who have invested in a range of diversified assets with minimal refinancing risk during our secondary investment period. The same strategy also applies for secondary direct asset investments.
We are primarily focused on the developed infrastructure markets where investment opportunities should continue to arise from underinvestment in infrastructure, ongoing privatisation by governments and opportunities coming from the private sector. In addition, we will consider selective investments in developing markets.
When considering infrastructure managers we have historically reviewed and priced managers in Canada, US, Latin America, Europe, Asia, and Australia. Our team is committed to developing true partnerships with both limited partners and general partners globally in order to be their ideal replacement capital partner. Our aim is to bring the much needed private replacement capital and innovation via tailor made structuring solutions in the delivery of the ideal secondary sale to the seller, or restructuring for the general partner.
If you are ready to discuss an ideal solution for your private infrastructure investments or secondary direct infrastructure, please contact our team at:
Alternatively, please use the “submit a deal” form our website to approach us on bilateral and confidential opportunities.