Patria gets multilateral support for new infrastructure fund
March 22, 2024
March 22, 2024
by Thierry Ogier | February 21, 2024
Brazilian investment firm Pátria Investimentos has raised 20% of a new BRL5 billion ($1 billion) infrastructure fund with contributions from development banks, pension funds and multilateral lenders.
“We have raised an initial BRL1 billion with Brazilian development bank BNDES, the International Finance Corporation (IFC), CAF and other institutional investors,” Alexandre Coutinho, partner and head of credit at Pátria, told LatinFinance.
BNDES provided BRL500 million, while Latin American development bank CAF put in BRL123 million, Coutinho said.
IFC, the private sector division of the World Bank, contributed an initial amount of BRL200 million and has committed to invest BRL780 million. Pension plans will also invest in the fund as Pátria expects to raise the full BRL5 billion within three years, according to Coutinho.
“This is pure project finance,” he said.
INFRASTRUCTURE DEBENTURES
The fund could invest in the newly created infrastructure debentures that grant tax benefits to issuers, instead of the so-called incentivized debentures that offer income tax exemptions for individual investors.
“The fund is unique and exclusive because it is not necessarily intended to invest in incentivized debentures. Issuers may now benefit from tax incentives, according to the new regulations on infrastructure debentures, which grant them new benefits. This fund can invest in up to 20-year securities and is directed to institutional investors rather than individual investors,” Coutinho said.
Pátria plans to use the fund to invest in small-scale infrastructure projects worth between BRL50 million and BRL100 million, including some in the government’s flagship program to accelerate growth.
The fund is expected to unlock investments for companies that do not have easy access to the capital markets in sectors such as energy transition, water and waste management and urban mobility, according to Pátria.
“The active participation of the private sector in capital markets is essential to economic growth within a limited fiscal space for public investment,” said Carlos Leiria Pinto, IFC’s country manager in Brazil.
The involvement of IFC, CAF and BNDES is important in terms of sustainability, Coutinho said.
“This shows that the best investment standards will apply, including social and environmental responsibility. This may help convince institutional investors, who are still cautious towards infrastructure, that it is possible to invest with social and environmental responsibility and get good returns,” he said.
Pátria has BRL35 billion assets under management. It has also launched a $1 billion infrastructure equity fund called Fundo Infra V.
Link: https://latinfinance.com/daily-brief/2024/02/21/patria-gets-multilateral-support-for-new-infrastructure-fund/
