GSIS, Macquarie set up $625-M fund for PPP projs

MANILA, Philippines - The Government Service Insurance System (GSIS) and Australia’s Macquarie Group have set up a $625-million fund to invest in infrastructure projects in the Philippines, including those to be offered under the Public-Private Partnership (PPP) program.

In a press briefing yesterday, Macquarie Infrastructure and Real Assets (MIRA) senior managing director Frank Kwok said the fund, Philippine Investment Alliance for Infrastructure (PINAI), is the first of its kind in the country and well-timed to capitalize on various infrastructure opportunities in the Philippines.

He said other investors in the fund include Dutch pension fund asset manager Algemene Pensioen Groep (APG) and the Asian Development Bank. The state-run provident fund GSIS contributed the bulk at $400 million while the ADB accounted for $25 million.

MIRA, the largest infrastructure fund manager globally with approximately $97 billion of assets under management across 24 countries, will manage the fund.

“The Philippines requires significant investment in infrastructure to meet the needs of what is one of the youngest and fastest-growing populations in Asia,” said Kwok.

PINAI will invest equity and equity-linked instruments directly in infrastructure projects across sectors such as transport, renewable energy and telecommunications.

“But more importantly, the fund provides a platform for increased participation of the private sector. In fact, other pension funds have expressed interest in joining these projects,” Kwok added.

 The director general of ADB’s private sector operations department, Philip Erquiaga, said he hopes the fund will lead more private equity funds to inject foreign capital into the Philippines and help develop the country’s capital markets.

“ADB’s participation can help mobilize additional investment in the Philippines from top-tier international partners, foster competition in domestic infrastructure finance, and establish a secondary market for well-performing infrastructure assets,” he said.

“As a fund manager, we look for an ideal environment to establish and ensure the sustainability of a fund, and the Philippines is a priority area for private sector investments in infrastructure which is needed by the Philippine economy,” Kwok added.