HGC owner and GCX bidder raises $7bn for more infrastructure investments

05 September 2018 | Alan Burkitt-Gray

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The investor that last year bought Hong Kong carrier HGC Global Communications has raised $7 billion for more investments.

The normally tight-lipped I Squared Capital (ISQ) announced that it had exceeded its initial fund-raising target of $5 billion and received commitments from over 100 investors.

ISQ bought HGC in 2017 for $1.9 billion and is one of the last two bidders in the contest to acquire Global Cloud Xchange (GCX) and other telecoms operations from troubled Indian operator Reliance Communications (RCom).

Capacity has been told by people in a position to know that if ISQ succeeds in its bid to buy GCX for $1.1 billion it will seek to merge the operation with HGC. An HGC executive, contacted about the possible deal, told Capacity: “Sorry that we have no comment on the GCX story and the bidder.” The other bidder is a consortium of private equity groups. Both are offering the same $1.1 billion and both bids include RCom’s enterprise business and its data centres in India along with the GCX global fibre network.

Telecoms is a relatively new area for ISQ, which used to say it was “an independent global infrastructure investment manager focusing on energy, utilities, and transport in North America, Europe, and select high growth economies”, but has now added the word “telecommunications” to its boilerplate text. 

According to an Infrastructure Investor report seen by Capacity, ISQ raised a $3 billion infrastructure fund in 2015 and later that year it added $200 million from the US government’s Overseas Private Investment Corporation. This means that, with the new $7 billion raised through its ISQ Global Infrastructure Fund II, it has expanded considerably in size. The company says it has $13 billion worth of assets under management.

Sadek Wahba, a managing partner at ISQ, said about the new funds that 24% had already been invested, “with portfolio companies in the US midstream sector; the leading trailer and trailer services provider in Europe and Canada; the second largest telecom fibre network in Hong Kong; and nearly 3,400 megawatts of power generation in nine countries across Latin America”.

He added: “We currently see opportunities globally with attractive risk-adjusted returns across different sectors including energy, telecom, transport, and utilities in the US and Europe as well as in high-growth economies including India, China and Latin America.”