italian pension funds investing in infrastructure: arpinge spa · contabile angela carelli analista...
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Italian Pension Funds investing in infrastructure:Arpinge Spa
November 2017 2Company Profile
A pilot initiative inspired by international best practices, open to other investors whoshare the same values and objectives
CIPAG EPPI INARCASSANEW PARTNERS
are welcome
November 2017 3Company Profile
Private, yet institutional, investor in infrastructure Arpinge in brief
Investor/Promoter: Italian joint stock company established in late
2013 as an holding company
Structured and transparent decision-making process: Governance and management processes inspired by international best practices
Target: Investment in small and medium-sized infrastructure across the country
Development of sound and “eligible” projects: focus on key industrial
drivers, sound business models and good management
The management team: a qualified, cohesive team, with a mix of industrial and financial skills
Tried and tested innovative investments: Solid portfolio of investments and many new opportunities in pipeline
Impact investing and sound long term returns: focus on operating assets
with attention to “greenfield” to seek higher return
Attractive returns: Tight financial policy and primary focus on economic and financial returns
November 2017 4Company Profile
Market position
PLAYERS
> 1,000
0 - 200
200 – 1,000
SMALL/MEDIUM-SIZED NATIONAL PLAYERS
MAJOR GLOBAL PLAYERS
MAJOR NATIONAL PLAYERS
Arpinge market
segment
High-potential opportunities
Possible upsides in returns
Closing the deals can be more difficult and time consuming
Strategic, large-sized assets and networks of national interest
Greater co-investment opportunities
By definition part of the international market
A wide range of opportunities promoted by existing large players to be given a clear and unique strategy
Development of platforms and partnerships with major infrastructure players
MAIN CHARACTERISTICS:
• Arpinge has been established to fill a market gap in the small and medium-sized national infrastructure segment.
• Such infrastructure is more local in nature and is characterised by a higher GDP multiplier, but also complexities and a sensitive economy of scale!
• By definition, this market segment has seen smaller interest from foreign investors due to its size, complexity and local sensitivity.
INVESTMENT TICKET (€m)
November 2017 5Company Profile
10%
40%
30%
20%
Revolving Projects
Value-Added Projects
Greenfield Projects
Operating Projects
In line with the investment targets and in order to preserve significant diversification in the investments portfolio, Arpinge’s objective is to invest in Italy in the following fields:
IRR in line with the related risk profile: in term of asset, framework and sector
Initial Asset Allocation
(with no authorisation risks)
part of the assets already operative and generating
income, while the remainder need to be renewed
with investments that generate immediate income, and a way-
out of less than 5 years
WHICH INFRASTRUCTURE?
ACTIVE SECTORS
SECTORSUNDER ANALYSIS
In any case, medium-sized infrastructure in Italy, stand-alone ornetworked, especially under concession agreement. URBANinfrastructures is one of the main focus of the Company!
Type: Infrastructure already operational or in need of redevelopment/construction?
Both solutions have a precise asset allocation
Greenfield projects to seek profit and basic quality and operating projectsto acquire stable cash flows from the off
Parking & Urban Mobility
CleanEnergy
EnergyEfficiency
Social and healthcare
infrastructure
Transportinfrastructure
Energy grid
Energy recovery from primary and
secondary materials
INVESTMENTS, PIPELINE AND ASSET ALLOCATION
November 2017 8Company Profile
Search, selection and analysis
€8.8 bn
€1.3 bn
€273 m
€186 m
€153 m
EXAMINED411 Projects
PIPELINE106 Projects
NEGOTIATION28 Projects
APPROVED12 Projects
PORTFOLIO10 Projects
€2.6 bn
€0.7 bn
€159 m
€100 m
€84 m
ASSET VALUE(Enterprise Value)
EQUITY VALUE(Arpinge’s investment)
Eligibility rate
7%
Whereof
Whereof
Whereof
Whereof
November 2017 9Company Profile
Asset Allocation
Of the total value of the investment (asset value)
PORTFOLIO*
ASSET ALLOCATION
LOCATION
UNDER NEGOTIATION PIPELINE
(*) In the start-up phase, a priority has been given to the
operating assets
Value Added10%
Greenfield
29%Operating
61%
Value Added11%
Greenfield
44%
Operating45%
Greenfield
26%
Operating
74%
North
15%
Center
34%
South
51%
North35%
Center36%
South29%
North
57%
Center25%
South18%
November 2017 10Company Profile
Investment Trend
• The investment curve grows over time
•Usually, infrastructure funds have an investment periods between 4 and 6 years
• Arpinge’s activities are developed according to a trend in line with the usual marketdynamics
(*) In case of acquisition of a selected number of projects under negotiation. Since the list of opportunities grows
over time, this value is likely to rise.
123
94
51
34
3
75
34
116
11
20152014
0
Forecast 2018*
Forecast 2017*
2016
Commitments
Investments
Allocation @Oct-2017Cumulative Arpinge’s investments and commitments (€m)
PV
Energy Efficiency
Wind
Hydro
Car parks
17%
42%9%
17%
15%
153 M€Asset Value
24%
30%16%
4%
26%86 M€
Equity Value67M€ already
invested
ORGANISATIONAL STRUCTURE
November 2017 12Company Profile
Group Structure
Project company – Clean Energy (Solar PV)
LEGENDA
Project company - Clean Energy (Wind)
Project company – Clean Energy (Hydro)
Project company – Energy Efficiency
Holding
Subholding
Project company – Parking and Urban Mobility
ARPINGE SPA
AEER Srl
Albamar Srl100%
GESPAR SPA100%
PNE2 Srl
GFG Solar Srl
Ecosaving Srl
Burgentia En. Srl
EOS Energia Srl
100%
100%
100%
100%
60%
58%
Energia Pulita Srl100%
100%DP Energia Srl
Lageri Srl70%
100%RP Energy Srl
November 2017 13Company Profile
Board of Statutory AuditorsThe Board of Statutory Auditors supervises compliance withthe law and the Articles of Association, in accordance withthe principles of proper and careful administration andparticularly the adequacy of the organisational,administrative and accounting system adopted by thecompany and its actual operation.
Arpinge was established with governance principles inspired by the best international experience and the criteria typicallyapplied to companies, subject to regulation and supervision, operating in the asset management sector. The company’smain credentials include: independence in the management sphere, full transparency and traceability of decision-makingprocesses, analyses and decisions marked by professionalism and consensus, and structured control mechanisms.
Board of DirectorsThe company is managed by a Board of Directors comprisingfour directors, including the Chairman. The Board of Directorsdetermines the objectives and general strategies for thecompany’s management, investment policies and sectoralpriorities and approves investment and disinvestmentoperations.
Cristiano Cremoli
Chairman
Claudio Guanetti
Director
Federico Merola
Managing Director
New Director to be charged
Pier Giorgio Cempella
Chairman
Giuseppe Grazia
Standing Auditor
Massimo Cavallari
Standing Auditor
Governance
November 2017 14Company Profile
Supervisory Body
The Supervisory Body is an independent and autonomous body which supervises the correct application of theOrganisation, Management and Control Model pursuant to Italian Legislative Decree 231/2001, governing the company’sliability for offences committed in its interests by senior management or employees, and oversees its application.
Auditing FirmThe responsibility for auditing its accounts is entrusted, for the first three-year period, to KPMG.
Giovanni Canepa
Independent Member
Marco Cecchi de’ Rossi
Independent Member
The Managing Director, 2 Senior Partners and Proposer Partnerare members of the Investments Committee, along with:
Investments CommitteeThe Investments Committee comprises the Managing Director,Senior Partners, Proposer Partner and two independent members,selected on grounds of proven experience in the infrastructureand/or real estate sectors.
It is a technical body with an advisory function, which issues areasoned opinion on each investment decision examined by Arpinge.In particular, the Investments Committee conducts joint, technicalassessments of conformity between the operations and theinvestment and management policies and strategies defined by theCompany’s Board of Directors, taking into account the differentrisk/attention areas pertaining to the management choices.
Governance
November 2017 15Company Profile
Organisational Structure
STAF
F
BOARD OF DIRECTORS
BOARD OF STATUTORY
AUDITORS
SUPERVISORYBODY
MANAGINGDIRECTOR
Federico Merola
INVESTMENTSCOMMITTEE
SECRETERIATV. BartoliD.Mercuri
STAF
F
Pier Giorgio Cempella Chairman
Massimo Cavallari Standing Auditor
Giuseppe Grazia Standing Auditor
INFORMATION TECHNOLOGY
LEGAL AND CORPORATE
ACCOUNTS AND PERSONNEL ADMINISTRATION
Single-member body
Managing Director, Senior Partner and Proposer Partner, together with:Giovanni Canepa Independent MemberMarco Cecchi de’ Rossi Independent Member
Cristiano Cremoli Chairman
Federico Merola Managing Director
Claudio Guanetti Director
New Director to be charged
Tania Sanna
ADMINISTRATIVE HEAD & OFFICE MANAGER
INVE
STM
ENTS
TE
AM
Egidio Labanca
ANALYST
SP
DEVE
LOPM
ENT
MAN
AGEM
ENT
Elisabetta Costa
INTERNAL AUDIT
Valerio Fiorentino
SENIOR PARTNER
Paolo Martone
SENIOR PARTNER
INTERNAL AUDIT
PROJ
ECT
MAN
AGEM
ENT Raffaele Pizzorusso
ENERGY SECTOR
Alessandro Labellarte
PARKING SECTOR
Resources in the workforces of subsidiaries
Auditing Firm: KPMG
A.Cavalli(Gespar)
PORT
FOLI
OM
ANAG
EMEN
T
Luciano Iannuzzo
PARTNERPLANNING AND CONTROL
ANALYSTLuigi Cupelli
SENIOR ANALYST
Marco Pignoloni
ANALISTA SENIOR
CONTABILE
Angela Carelli
ANALISTA SENIORSENIOR
ACCOUNTANT
Giuliano Villanova
November 2017 16Company Profile
Management Team
Expertise in origination and deal execution gained through 15 years of activities in the real estate and energy sectors, added to considerable experience in credit risk assessment for industrial projects.
Management responsibilities in listed industrial and real estate holding companies.
Formerly Managing Director at Realty Vailog and Alerion Industries, head of corporate rating at Italrating, loan officer at IMI.
Director of CIPAG since 2013 and Director of Arpinge since 2017.
President of the Board of Surveyors and Graduate Surveyors of the Province of Milan since 2012.
Has worked in construction since 1986, mainly in urban planning/construction for the development of real estate and due diligence initiatives.
Formerly, member of the Countryside Committee of the Municipality of Milan and the Public Works Committee of the Lombardy Region.
Adjunct Professor at the LUISS Business School and visiting professor of International Finance within the Master’s Course in Economy and Management (LUISS). Member of the Board of Directors of SACE SpA.
Over 25 years’ experience in infrastructure (and real estate) investments, as well as in structuring companies and alternative investment funds.
Some of his previous roles include: General Manager of ANCE, Senior Partner at F2i SGR, Director of BNP Paribas REIM SGR and Invimit SGR (MEF); Director of FIMIT SGR, Executive in PFD at MCC and Schroeder.
Over 16 years’ experience in the development of real estate projects.
Development Manager for highly-complex projects, promoted by leading Italian and international investors, such as Hines, Doughty Hanson, Fimitand BNP, with the support of banks, public institutions and international institutional investors.
Head of economic/financial investment results, coordination of project teams, technical, legal and tax consultants, procurement, monitoring, stakeholders’ relations stakeholders, risk management and leasing/sales.
Cristiano Cremoli - Chairman Federico Merola – CEO
Valerio Fiorentino – Senior Partner Paolo Martone – Senior Partner
Over 20 years experience in project finance in the infrastructure and energy sectors, supervision in the contract/due diligence phase
Previous experience in the Api Group and financial institutions (BNP Paribas, Unicredit, MCC): Most recently, head of Structured Finance and Management of subsidiaries of the Api Group; previously Loan officer at MCC in project finance/project bond/export credit.
Elisabetta Costa - Partner
Experience in assessing investment andacquisition operations in the power & gasand renewables sectors, accrued through13 years spent at Capgemini, ERG and Api.
Has held executive positions in Api Group
Formerly head of the Energy Management andRegulation and Market (power & gas) departmentsfor the Api Group and the Strategic Planningdepartment for Api Nòva Energia.
Egidio Labanca – Partner & CEO AEER
Over 15 years’ spent at F2i, Simest,ANAS and Accenture
Previous experience in assessing infrastructureinvestments in Italy and abroad and managementin gas, motorways, airports, water, renewables,WtE, TLC and logical networks sectors.
Previously on the Boards of various subsidiaries inthe portfolio of F2i
Luciano Iannuzzo - Partner and Head of Planning and Control
November 2017 17Company Profile
Management Team
Marco Pignoloni – Senior Analyst Luigi Cupelli - Analyst
At Arpinge since September 2015, with expertise in the financial evaluation, mainly in the renewable and energy efficiency sectors.
Formerly Investment Analyst at Joule Assets Inc, Project Finance Analyst at Sinergia Sistemi - Fondamenta Group - and in the Business Development Department at the Hanergy Group.
At Arpinge since June 2016; formerly Financial Analyst at TernaSpA, in the Strategy & Business Development department, where he handled the assessment of investments in the Group’s non-regulated activities, chiefly in the Power and TLC sectors.
Gained experience in M&A operations and the structuring of investments in energy infrastructure in Italy and abroad.
Alessandro Labellarte – Project Manager
At AEER since July 2017. Previously Head of Special Projects atGreen Network SpA, with the responsibility to develop and manage the RES portfolio, and with the role of "energymanagement expert" for the E.S.Co. Branch of the company.
Multi-year experience as project manager in the power generation from renewable sources and energy efficiencysectors.
Raffaele Pizzorusso – Project Manager
ACCO
UNTI
NG
At Arpinge since November 2015. Previously held the role of Head of the Middle-Office at F2i Sgr, handling the accounting/administrative management of managed funds, relations with the Control and Supervisory Authorities and the settlement of investments and relations with Investors.
Tania Sanna – Head of Administration
PROJ
ECT
MAN
AGEM
ENT
At Arpinge since March 2017. Over 15 years’ experience in the concessions sector and the assessment of infrastructure investments, five of which were spent at Banca IMI, in particular motorways, parking and public transport, in Italy and abroad.
Within the Saba Group, the European leader in car park management, held both operating and management roles and various positions at subsidiaries or affiliated companies.
ANAL
YST
In Arpinge since november 2017, was previously senior auditor inone of the Big Four auditing firms and then worked in a companyspecialized in photovoltaic fields carrying out the projectfinancing process.
Dr. Giuliano Villanova – Senior Accountant
Investments
November 2017 19Company Profile
30%
24%16%
4%
26%
Energy EfficiencyParking & Urban Mobility Clean Energy
Portfolio - October 2017
• Share of Arpinge’s equity by sector, net of liquidity(2017 figures);
• Values refer to projects in portfolio;
• Considering the pipeline on-going, a significantgrowth is expected in the parking and mobility sector;
• Other sectors in the analysis phase.
Wind
Solar
Parking
Hydroelectric
EnergyEfficiency
Investments Portfolio
86 M€Equity Value
(67M€ alreadyinvested)
November 2017 20Company Profile
Projects in the Portfolio – Parking & Urban Mobility
Gespar SpA
≈ 3,600 car spaces
In portfolio since 2016
≈ €2 m in turnover
7 car parks
November 2017 21Company Profile
Solar
Assets: 6 plantsTotal Power: 10.2 MWLocation: Abruzzo/MarcheStatus: OperatingAcquisition date: 2015-2016-2017Asset Life: 25 years
Hydro
Assets: 1 plantPower: 2.8 MWLocation: BasilicataStatus: Under constructionAcquisition date: since 2016Asset Life: 30+30 years
Wind
Assets: 2+1 plantsPower: 34 MW (operating)
9 MW (development)Location: Basilicata / SicilyAcquisition date : 2016-2017Asset Life: 30 years
Projects in the Portfolio – Clean Energy
November 2017 22Company Profile
FreeConad SpA
13 Conad stores
In portfolio since 2015
≈ €25 m capex
Projects in the Portfolio – Energy Efficiency
An Italian energy efficiency pilot project innovative in terms of its contractual company/finance structure, as well as the
combination of redevelopment and energy efficiency activities.
EPC CONTRACTOR
O&M CONTRACTOR
OUTLETS
ProjectFinancing
O&M Contract
EPC Contract
58%
Ecosaving Srl
Patronage
Fee
Service Contract
40% 2%
November 2017 23Company Profile
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