INPP makes digital infrastructure commitment – International Public Partnerships (INPP), the FTSE 250 infrastructure investment company, has committed jointly with HM Government to make an investment in digital infrastructure and particularly fibre optic broadband connections. It sees long term parallels between the essential nature of broadband connectivity to the home and workplace, and the established businesses of gas and electricity distribution and transmission with which it is already experienced.
The investment that INPP has committed to will be made through a co-investment vehicle into which INPP has committed up to GBP45 million and HM Government has committed up to GBP150 million. This co-investment vehicle has been established as part of the UK Government’s Digital Infrastructure Investment Fund initiative launched today by Exchequer Minister Andrew Jones MP at a conference in Peterborough.
The co-investment vehicle has been established as a collective investment vehicle as a consequence of and following a competitive process run by HM Government seeking investment commitment and investment management advice to establish broadband infrastructure investment platforms. Amber Infrastructure and INPP bid for the opportunity jointly. The vehicle is one of two co-investment vehicles being established under this initiative.
The co-investment vehicle has been named the National Digital Infrastructure Fund (‘NDIF’). The National Digital Infrastructure Fund will seek out investment opportunities in businesses and projects that own and build digital fibre-based network assets and related infrastructure. The involvement of HM Government is to support its policy of boosting the deployment of full-fibre connections and ultrafast broadband access across the UK.
The National Digital Infrastructure Fund will be managed to make lower risk investments that fit INPP’s investment mandate and target returns with a focus anticipated on long-term fibre broadband assets which will generate stable returns for the co-investment vehicle and thus INPP. Investments are expected to be made over the next four years and the HM Government commitment is for a ten year period. No investments have been made as yet. Any investment opportunities within the fibre broadband sector that meet INPP’s investment mandate will be made through the National Digital Infrastructure Fund structure.
Under the terms of the procurement Amber Infrastructure, the investment adviser, has been appointed to provide investment management services to the National Digital Infrastructure Fund and will receive a base fee (and in certain circumstances a performance fee) from the National Digital Infrastructure Fund for such services. However, to avoid potential duplicate fees, INPP will have no liability in respect of additional base fees in excess of those currently chargeable under the existing Investment Advisory Agreement. Amber has also itself committed a GBP5 million investment to the National Digital Infrastructure Fund .
Rupert Dorey, Chairman of INPP commented; “Digital infrastructure is an exciting new asset class. Fibre broadband connections are likely to become essential infrastructure assets in the future. We believe that this commitment offers an early entry point for the Company into a sector with clear lineage to the long-term, stable, inflation linked returns of our utility-network assets. INPP will once again benefit from first mover advantage, taking a strong defensive position in an attractive asset class. This investment also reinforces the Company’s position as a trusted and preferred investment partner to the public sector.”
INPP : INPP makes digital infrastructure commitment