GSIS, 3 partners launch P25B infra fund

The Government Service Insurance System and three investor partners on Tuesday launched the largest-ever infrastructure fund set up for the Philippines at $625 million, or P25 billion.

The fund, dubbed Pinai, or Philippine Investment Alliance for Infrastructure, also drew the participation of the Asian Development Bank, Dutch pension fund asset manager Algemene Pension Groep (APG) and Macquarie Infrastructure and Real Asset (MIRA).

MIRA is part of the Macquarie Group and was also appointed as the Pinai fund manager.

Robert G. Vergara, GSIS president and general manager, said in a briefing that the state pension fund—being the lead investor—accounted for $400 million of the Pinai fund.

Philip Erquiaga, ADB director general for private sector operations, said the bank chipped in “a nominal $25 million” but APG and Mira declined to disclose their respective investments.

Erquiaga noted that under the Philippine Development Plan, 12 percent, or $14.3 billion, of the country’s $120-billion infrastructure investment needs for 2011-2016 must come from the private sector.

“It is with this intention of helping close the gap in infrastructure financing that the ADB has collaborated with (GSIS, APG and MIRA) to establish the Pinai fund,” he said.

Mira senior managing director Francis Kwok said the Pinai fund was meant for directly investing equity and equity-like instruments in infrastructure businesses and projects.

“It will invest in a mix of both brownfield and greenfield projects across the infrastructure sector, including transport, power, renewable energy, water and telecommunications infrastructure,” Kwok said.

The four partners wanted a diversified portfolio of five to 10 projects at $50 million to $125 million each.

“As the largest infrastructure fund ever assembled for the Philippines at P25 billion, this fund is envisioned to create more jobs for our people and put the country on the path of sustained and higher levels of inclusive economic growth,” Vergara said.

Vergara added that the GSIS, through the Pinai fund, was diversifying its income sources toward achieving bigger returns that would enable “enhanced services and benefit programs for [the agency’s] 1.7 million members and pensioners.”

Vergara added that the GSIS was still ready to put in P50 billion in a planned P200-billion infrastructure bond fund meant to finance the government’s public-private partnership (PPP) infrastructure program, “although there is no call yet for such funds.”

MIRA’s Kwok said that with the Pinai fund having been launched, the group’s thrust was for the fund to be deployed particularly for brownfield projects—those that were already existing and needed expansion or rehabilitation.

Kwok said such projects could include PPP projects, but clarified that the Pinai fund was not solely for the benefit of the PPP initiative.

“It is also possible that we may be investing in purely private-sector projects,” he added.