ADIC-UBS Infrastructure Fund I raises $250m

The joint venture between Abu Dhabi Investment Company and UBS Global Asset Management is raising a $600m fund to invest in infrastructure development in the MENA region. Research commissioned by the two firms predicts soaring government infrastructure spend in the region.

Middle Eastern investment firm Abu Dhabi Investment Company and Swiss asset management giant UBS have raised $250 million for the first close of the ADIC-UBS Infrastructure Fund I.

The fund, jointly managed by the two firms, is targeting commitments of $600 million for its final close. It will invest in transport networks, power, water, education and health facilities.

MENA: $400bn of infrastructure spending planned

“Most of the fund's investments will be in 'greenfield' assets, but because we are talking primarily about government concessions or long-term contracts with solid partners, cash flows are predictable and the risks less than in pure private sector deals,” Vincent Gilles, chief investment officer of ADIC-UBS Infrastructure Investment, said in a statement.

“The Middle East is often seen as a source of capital but we want to highlight to investors that there are also great investment opportunities here,” Mark Thompson, chief executive of ADIC-UBS Infrastructure Investment, said.

He added that infrastructure in the region is still being developed and “there’s a massive need for equity”. Governments in the MENA region are looking to spend large sums on infrastructure development and research commissioned by the ADIC-UBS Infrastructure Fund indicates that more than $400 billion of spending is planned for the next decade, the statement noted.

ADIC-UBS Infrastructure Investment is a 50:50 joint venture formed by the two firms in February 2008. It is planning to launch new funds over a three year period, including a second infrastructure fund which will raise up to $1 billion.