SYDNEY (Reuters) - Australian fund manager IFM Investors said it is targeting investment in airports in Japan’s massive asset privatization drive as the fund increases its exposure to Asia.
Chief Executive Brett Himbury said IFM, Australia’s second-biggest infrastructure investor, also planned to open an office in Seoul by year’s end in response to greater investment inflows there, and to increase the number of investment managers at its Hong Kong and Tokyo offices.
“You need to be patient in Japan, you need to be long term. We respect that and have now been there four years and it has gone quite well for us,” Himbury said in an interview at the Reuters Global Investment 2018 Outlook Summit on Monday.
“We are at a stage where we are looking to play an active role in the processes pursued by the Abe administration as they continue to roll out their policy, so we will increase our investment in, and commitment to, Japan.”
Japan’s government, which has debt of more than twice GDP, is pushing to revitalize the economy by overhauling its infrastructure either through full privatization or via lease agreements.
IFM was also considering seaports and airports in OECD economies because they were pegged to economic growth, rather than policy, Himbury said. The A$98 billion ($75 billion) fund owns stakes in 32 infrastructure assets across the world, with more than half its institutional investors based in North America.
Himbury said he met senior members of the Trump administration earlier this year to promote IFM’s model of public partnerships with pension funds. Unlike most U.S. investors, who exit an asset in seven to 10 years, IFM plans to hold and manage its acquisitions long-term.
“With those, we are able to invest the capex in the long term and improve the quality of services, increase earnings, create jobs, and get politicians re-elected,” Himbury said. “In the United States we are focused on the transport sector, particularly seaports.”
Trump has promised a bold $1 trillion infrastructure investment plan over 10 years for roads, bridges, airports and transit systems across the country. IFM acquired the Indiana Toll Road between Chicago and the Ohio Turnpike in 2015.
Himbury said IFM is also keeping an eye on China’s $124 billion Belt and Road initiative to create a modern-day Silk Road, but noted than many of its projects were financed by China government-owned policy and commercial lenders.
“We are finding ample opportunities in, and demand from, other countries that don’t have the large amounts of capital that China has,” Himbury said.
($1 = 1.3080 Australian dollars)
Reporting by Paulina Duran Editing by Jane Wardell and Eric Meijer