AIIB hopes $150m investment will kick-start private infrastructure funding

The AIIB will become a limited partner investor in the Singapore-based Keppel-Pierfront Private Credit Fund.

The investment is reported as including $100m investment and $50m co-investment which means AIIB will invest $50m on projects alongside the fund but not through the fund.

The AIIB aims to promote infrastructure private credit as an emerging asset class in Asia. Its participation in the fund is expected to mobilise private capital to address the financing limits of medium sized companies in the infrastructure sector in Asia Pacific.

The estimated date of financing approval for the investment is June.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said:” This investment by AIIB underlines the importance that multilateral and development agencies can play in helping to mobilise private capital. Where private capital can be deployed readily, such institutional funding should not be required as market forces should work to match private capital with opportunities. Where this is not the case, then the involvement of such funding has the ability to catalyse private sector investments, which demonstrates the value add of such institutional funding.”

Keppel-Pierfront private credit fund is a private credit fund focusing on providing customised debt to organisations or projects mainly in real asset sectors across the Asia Pacific region. Its investment scope covers infrastructure, real estate, transportation and logistics, and energy and natural resources. The target size of the fund is $600m.

Pierfront Capital currently has two shareholders which are Clifford Capital Holdings (CCH) and Keppel Capital, a subsidiary of Keppel. CCH in June 2020 acquired a 50% stake in Pierfront Capital and Keppel in November 2019 acquired a 50% interest in Pierfront Capital for $7.8m.