The $15.5 billion Sunsuper industry fund has frozen commitments to one of its largest infrastructure managers, as it shifts its preferred entry mode to the asset class from equity to debt.
Sunsuper’s chief investment officer, David Hartley, said the fund was taking advantage of banks’ reluctance to lend on infrastructure deals, stepping in itself for returns that were “akin to what you’d get for equity” but placed further up the capital structure.
As a result, Hartley said Sunsuper was not currently allocating monies for new investment to its major unlisted infrastructure manager, Access Capital Advisers.
Hartley said the decision was related to strategic asset allocation, although he did suspect the manager had lost some of its “transactional capacity” following the departures of several chief dealmakers. These include Paddy Jilek, and US office chief Matt O’Donnell.
True to its belief that there were currently great opportunities in debt, Hartley said Sunsuper had recently attempted a foray into mezzanine financing, providing the ‘middle’ tranche of funding for a property company which thought it had found a “forced seller” of a particular commercial building.
As it turned out, the vendor was able to hold out for a higher price, leaving Sunsuper with no investment and a small commitment fee to pay, but Hartley intimated the fund was willing to try again.