JV Targets Infrastructure Investment Across US

NEW YORK CITY-Tapping into the growing demand for infrastructure capital and the public sector’s increasing challenge in mustering it, CityView and Access Capital Advisers subsidiary AE Capital Advisors have formed CVAE, a joint venture to be headquartered here. The partnership will invest in all classes of infrastructure assets, emphasizing direct investments of subordinated debt in municipal projects as well as equity in public-private partnerships, according to a release.

“We see our joint venture with Access as an essential component of the effort to bring much needed infrastructure growth and long term stable pension returns to the North American market,” says CityView founder and executive chairman Henry Cisneros, formerly secretary of housing and urban development, in a statement. His counterpart at Access. David Chessell, says in a statement that infrastructure provides investors with “more flexibility in building portfolios involving diversified sources of growth.” He adds, “The continued need for investment in infrastructure, coupled with the strained budgets and restricted borrowing capabilities of state and local governments and authorities across the US, requires innovative approaches for funding infrastructure.”

CVAE will be jointly managed by Andrew Cunanan, partner of Access Capital and manager of AE Capital, and Victor Miramontes, vice chairman and co-founding partner of CityView. Cunanan was unavailable for comment early Thursday afternoon; Miramontes tells GlobeSt.com CVAE is looking at bringing in about $200 million from overseas investors per year, based largely in Australia, and a comparable amount from domestic sources, primarily pension funds.

The low-risk, stable nature of infrastructure assets makes them a good fit for pension funds, says Miramontes. “Prior to the downturn, pension funds were gearing up for more investment in the infrastructure space,” he says, adding that it’s not certain how quickly domestic funds would be able to ramp up their involvement, although Australian funds would be “ready to go now.”

CVAE’s specialty will be infrastructure projects in America’s urban centers, especially transportation-related assets, Miramontes says. In a release, the JV says the infrastructure sector’s value is likely to double over the next 20 years; already it’s in the “trillions of dollars.”

Locally, the Port Authority of New York and New Jersey’s decision to seek private funds for a $1-billion rebuilding of the Goethals Bridge connecting Staten Island and New Jersey is seen as a bellwether project that could pave the way for more PPPs. Richard T. Anderson, president of the New York Building Congress, told GlobeSt.com earlier this month that private financing of public facilities has “a lot of potential. Private financing is more important than ever, because public sources of funding are more limited these days. It frees up additional capital, and it brings some of the efficiencies that the private sector may be able to introduce to the overall equation.”

Based in Australia, Access Capital has more than $3 billion invested globally in infrastructure assets, according to its website.