DIF sells €125-million renewable portfolio to Pension fund ABP

DIF has announced that it has signed an agreement to sell the entire portfolio of assets held by its 2008-vintage DIF Infrastructure II fund to APG Asset Management N.V., acting on behalf of pension fund ABP.

The transaction comprises 48 PPP / PFI and renewable energy assets, worth around €125 million US$143 million across, Continental Europe and the UK

DIF II was launched in October 2008 with a 10-year life to invest in infrastructure projects that offer long-term stable cash flows and an attractive return. The fund reached a final closing in July 2010, with €572 million of committed capital and made 58 investments; of which 10 investments have already been realized. The remaining portfolio includes investments in hospitals, schools, government accommodation, roads, solar and wind projects.

With the end of the Fund’s term in 2018, DIF considered the potential alternatives for realising the portfolio and ultimately concluded that value would be maximised by launching a process for the sale of the portfolio as a whole or in parts, if preferred by bidders. The bidding process also enabled institutional investors to bid for a share in the portfolio and to elect for an optional agreement with DIF to continue to manage the portfolio. This transaction structure also allowed DIF Infrastructure III (“DIF III”) to sell its cross-shareholdings in 12 of the portfolio assets. DIF mandated Campbell Lutyens and Loyens & Loeff as financial and legal advisors, respectively.

Following a competitive bidding process, APG was selected as the preferred bidder for the acquisition of the whole portfolio of DIF II and the cross-shareholdings of DIF III. As part of its bid, APG requested DIF to continue to manage the portfolio through a new investment vehicle, with a term of 25 years.

Wim Blaasse, Managing Partner of DIF said:

“We are very pleased to have agreed this transaction with APG. It generates an excellent result for the DIF II investors, well above the Fund’s target return at inception, and will allow the Fund to be fully realised within its contractual life. The successful exit is a strong endorsement of DIF's strategy and approach, as well as the commitment of the DIF team”

Immanuel Rubin, Partner at Campbell Lutyens said:

“This is one of the largest infrastructure portfolio transactions in over five years, following a trend of high-quality managers using portfolio transactions to successfully exit their holdings.”

The transaction, which is subject to EC anti-trust approval, is expected to close in Q3 2017.