Private Infrastructure Strategy
Private Infrastructure Strategy

Private Infrastructure Strategy

 
 
 
Summary

The Private Infrastructure Strategy, managed by Morgan Stanley Infrastructure (MSI), employs an established, disciplined process to invest in diverse infrastructure assets in predominantly OECD countries and seeks to create value through active asset management and operational improvements.

 
 
Investment Approach
Philosophy

Morgan Stanley Infrastructure seeks to pursue a global OECD core-plus strategy by focusing on the acquisition of infrastructure assets with the potential of being turned into core assets, but which, for various reasons, are being operated or managed in a less than optimal manner or where company functions need to be established or rebuilt. MSI defines these situations as core-plus opportunities, as they allow for significant value creation through operational improvements and can include carve-outs of assets from larger entities, assets being privatized, or generally undermanaged assets requiring capital for organic growth, business development projects, or follow-on acquisitions. MSI defines core infrastructure assets as mature businesses with long-term performance history, often operating in regulated environments or under concession or other long-term agreements, in many cases with a high degree of predictability and stability.

 
Differentiators
Global Network for Sourcing and Investing

MSI's global network for sourcing and investing benefits from Morgan Stanley’s presence in 43 countries, providing access to a very strong network of relationships and proprietary information flows to identify investment opportunities, many of which are not generally available in the public domain.

Experienced Team, Established Process

MSI benefits from a global team with deep experience in all aspects of infrastructure investing.  A carefully constructed, tested, and disciplined investment process is designed to ensure that investments are reviewed and compared on a global basis.  The size of the global team enables consideration of a large number of opportunities, which are filtered to identify and focus on those with the potential for the best risk-adjusted returns.

Operational Value-add Strategy

MSI's methodical and intensive approach to asset management has created value for assets in its portfolio of investments.  Such efforts have translated into additional revenues and EBITDA, or have reduced risk. In addition, MSI has improved the environmental profile of many of its portfolio companies.

 
Investment Process

MSI has a well-organized, thorough, and tested investment process. This process is designed to ensure that investments are reviewed and compared on a global basis. MSI's global scope allows the team to focus on deals that, in its view, offer particularly attractive risk-adjusted returns. Execution of this process is facilitated by the MSI team's deep experience in all aspects of infrastructure investing.

1
Screening
  • Source through proprietary channels
  • Analyze to determine key characteristics
  • Analyze to determine expected returns
  • Enlist third-party expertise
2
Portfolio Construction
  • Seek diversification
  • Meet defined thresholds
  • Determine contribution to overall return
3
Due Diligence & Structuring
  • Dedicated transaction team
  • Review of key risks and assumptions
  • Development of view on value
  • Seek to minimize risks
  • Structure debt financing
  • Negotiate terms of transaction
4
Investment Review
  • Deal Team
  • Review Team
  • Partners
  • Investment Committee
5
Investment Decision
  • Submission to Investment Committee
    • Bid Price
    • Select terms and conditions
  • Investment Decision
6
Implementation
  • Enhancement of portfolio company management
  • Cost control and rationalization
  • Capex—growth, reinvestment, and technology
  • Economies of scale
  • Financial optimization
  • Operational partnerships
  • Governance, corporate control, and regulatory measures
Investments

OECD ASSETS WITHIN MORGAN STANLEY INFRASTRUCTURE PORTFOLIOS

CURRENT HOLDINGS
Altán Redes Acquired March 2017
Altán Redes is an international consortium that holds a 20-year concession for the construction and operation of an operator-neutral, nationwide, 4G-LTE network in Mexico.
VTG AG Acquired October 2016
VTG is the largest private wagon hire company in Europe and one of the leading providers of rail and tank container logistics services.
Ital Gas Storage Acquired August 2015
Ital Gas Storage holds a 40-year concession to convert and operate a depleted gas field in Northern Italy into a regulated gas storage facility.
Eureka Midstream Acquired September 2014
Eureka Midstream is a natural gas gathering pipeline system, strategically situated in shale gas basins of the U.S. Northeast.

Medical Area Total Energy Plant Acquired May 2010
Medical Area Total Energy Plant is the sole provider of essential electricity, steam and chilled water to off-takers in one of the busiest medical zones in the U.S.

Chicago Parking Meters Acquired February 2009
Chicago Parking Meters is the third-largest metered parking system in the U.S., the first and largest asset of its kind to be concessioned under a public-private partnership.

EXITED HOLDINGS
Affinity Water Exited May 2017
Affinity Water is the largest regulated water-only company in the U.K. by revenue.
Agorá Investimenti Exited April 2017
Agorá Investimenti is the manager of Venice area airports, the third-largest area in Italy after Rome and Milan.

Madrileña Red de Gas Exited May 2015
Madrileña Red de Gas is the second-largest gas distributor in Madrid and third largest in Spain
Southern Star Exited April 2015
Southern Star is a primary gas transmission/storage facility provider for several major Midwest U.S. cities.
Eversholt Rail Group Exited June 2015
Eversholt Rail Group is one of three leading train-leasing companies in the U.K., with approximately 29% of total current British passenger rail fleet.
Montreal Gateway Terminals Exited March 2015
Montreal Gateway Terminals is the dominant operator at Port of Montreal and second-largest container facility in Canada.
Chicago Loop Parking Exited January 2014
Chicago Loop Parking (CLP) holds a 99-year concession to operate the largest underground parking system in the U.S. in the heart of downtown Chicago.
Saesa Group Exited November 2011
SAESA Group is the second-largest electricity distributor in Chile, serving more than 15% of the country's population through hydro, diesel, and gas electric generation.

Sapphire Holdings Exited November 2009
Sapphire Holdings purchased subordinated-debt from BAA, which, at the time, owned a number of British airports.
 
 
 
 
Investment Professionals  View Team Details >
Chief Investment Officer of Private Infrastructure Team
18 years industry experience
Managing Director
22 years industry experience
Managing Director
20 years industry experience
Managing Director
26 years industry experience
Managing Director
32 years industry experience
Managing Director
27 years industry experience

CONTACT US

For more information about Morgan Stanley Infrastructure, please contact
msipinvestor@morganstanley.com

 
 
Insights
Investment Insight
Chicago Parking Meters' Smart Technology System
Dec 02, 2015
Operational improvements by Morgan Stanley Infrastructure, including state-of-the-art technology, made the Chicago on-street parking system number one in the world.
Macro Insight
Mark McLean on Sky News
Feb 24, 2017
Mark McLean discusses the attractiveness of the Australian infrastructure market and the opportunities it offers to investors.
Investment Insight
The Creation of Madrileña Red de Gas
Dec 02, 2015
Morgan Stanley Infrastructure carved out part of an existing utility to create the first standalone gas distribution in Spain, then grew the company to be the third largest in the country.
 
 

As of 2/29/2016. Team information may change from time to time.

This is prepared for sophisticated investors who are capable of understanding the risks associated with the investments described herein and may not be appropriate for you.  The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

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