italian pension funds investing in infrastructure: arpinge spa · company profile july 2018 3 ......
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July 2018 2Company Profile
A "pilot" initiative inspired by international best practices, open to other investorswho share the same company values and strategic objectives
CIPAG EPPI INARCASSA NEW PARTNERS
July 2018 3Company Profile
Founding ShareholdersARPINGE: ARchitetti (Architects), Periti Industriali (Industrial Engineers), INgegneri (Professional Engineers),
GEometri (Surveyors)
Arpinge was set up by three pension funds (“Founding Shareholders”), representing the professions active in the Infrastructural and Real Estate sectors: Architects, Industrial and Professional Engineers, and Surveyors.
INARCASSA, CIPAG and EPPI represent abt 269,000 members and AUM of abt. EUR 13 billion (2017 figures)
Ente di Previdenza dei Periti Industriali edei periti industriali laureati - SocialSecurity Body for Industrial Engineers andGraduate Industrial Engineers.
Founded in 1997 pursuant to ItalianLegislative Decree 103/96, it deals withthe compulsory welfare scheme of allindustrial experts enrolled in specialcolleges, who are self-employed invarious areas. The protection alsoextends to family members and entitledheirs.
It has around 14,000 members and assets
of approximately EUR 1.2 billion.
Italian Welfare and Social Security Fundfor Freelance Professional Engineers andArchitects.
Around 168,000 members, of which 56%are under 40 years old vs 30k pensioners.
It has assets of over EUR 10 billion.
It provides social security for self-employed professional engineers andarchitects who have no other insuranceand pension coverage.
INARCASSA provides pensions (old age,retirement, disability, invalidity,survivor’s, survivorship and indirect) andwelfare benefits to its members.
CIPAG Italian Welfare and Social Security Fundfor Freelance Surveyors.
Established in 1955 as a public institutionfor social security and welfare forSurveyors.
Privatized on 1st January 1995 andtransformed into a private institution withits current name and has, to date, 87,000members.
It has assets of approximately EUR 2.3billion.
All freelance surveyors enrolled in thenational professional register whopractice the profession, evendiscontinuously and non-exclusively, aremembers of CIPAG.
July 2018 4Company 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
Solid and innovative pipeline: Solid portfolio of investments, and a strong pipeline for future investments also focused on new businesses/niche asset classes
Impact investing and sound long term returns: focus on operating assets with
attention to “greenfield” opportunities to seek higher returns
Attractive returns: Tight financial policy and primary focus on economic and financial returns
July 2018 5Company 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, with possible upsides in terms of returns, involving time-consuming deals
Market segment characterized by a lower competition (especially from international players)
Strategic, large-sized investments attracting, based on their intrinsic characteristics, the national interest and which are also part of the international market
Large-sized co-investment opportunities
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 segment, by its nature, (i) is highly influenced by local dynamics and requires a deep knowledge of the territory and of its main stakeholders, (ii)is characterised by a higher GDP multiplier, and (iii) displays a higher sensitivity to economies of scale
INVESTMENT TICKET (€m)
April 2018 6Company 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 immediate income, and a way-out of less than 5 years
(i) Greenfield projects to seek higher returns, and
(ii) Operating projects to ensure stable cash flows and a balancedrisk/return profile for the shareholders
July 2018 7Company Profile
WHICH INFRASTRUCTURE?
ACTIVE SECTORS
SECTORSUNDER ANALYSIS
In any case the company targets medium-sized infrastructure in Italy, stand-alone or networked, especially under concession agreement. URBAN infrastructures is one of the main focus of the Company!
Parking & Urban Mobility Clean Energy
EnergyEfficiency
Social and healthcare
infrastructure
Transportinfrastructure
Energy grid
Energy recovery
Reference Sectors
April 2018 9Company Profile
Search, selection and analysis
€10.6 bn
€2.0 bn
€627 m
€571 m
€157 m
EXAMINED470 Projects
PIPELINE126 Projects
NEGOTIATION24 Projects
APPROVED17 Projects
PORTFOLIO11 Projects
€3.3 bn
€0.9 bn
€218 m
€187 m
€90 m
ENTERPRISE VALUEEQUITY VALUE
(Arpinge’s investment)
Eligibility rate
5.1%
Whereof
Whereof
Whereof
WhereofOf which:• disbursements: 70 M€• commitments: 20 M€
April 2018 10Company 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
Greenfield
26%
Operating
74%
North14%
Center36%
South50%
Value Added24%
Greenfield14%
Operating62%
Value Added21%
Greenfield20%Operating
59%
North16%
Center66%
South18%
North39%
Center41%
South20%
ORGANIZATION
July 2018 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 Srl
100%
100%RP Energy SrlDP Energia Srl
100%
Lageri Srl70%
July 2018 13Company Profile
Organisational Structure
Auditing Firm: KPMG
2015 2016 2017 2018
FTE: 7,6 10,5 12,58 -
HEADCOUNT @ 31/12: 10 12 13 17
STAF
F
BOARD OF DIRECTORS
BOARD OF STATUTORY
AUDITORS
SUPERVISORYBODY
CEO
Federico MerolaINVESTMENTSCOMMITTEE
GENERAL SERVICESV. BartoliD.Mercuri
STAF
F
Pier Giorgio Cempella Chairman
Massimo Cavallari Standing Auditor
Giuseppe Grazia Standing Auditor
Single-member body
Managing Director, Senior Partner and Proposer Partner, together with:Giovanni Canepa Independent MemberMarco Cecchi de’ Rossi Independent Member
Valerio Bignami Chairman
Federico Merola Managing Director
Claudio Guanetti Director
Cristiano Cremoli Director
Tania Sanna
ADMINISTRATIVE HEAD & OFFICE MANAGER
INVE
STM
ENTS
TE
AM
Egidio Labanca
PARTNER
SP
DEVE
LOPM
ENT
MAN
AGEM
ENT
Elisabetta Costa
PARTNER
Valerio Fiorentino
SENIOR PARTNER
Paolo Martone
SENIOR PARTNER
PROJ
ECT
MAN
AGEM
ENT Raffaele Pizzorusso
ENERGY SECTOR
Alessandro Labellarte
PARKING SECTOR
Resources under subsidiaries
A.Cavalli(Gespar)
PORT
FOLI
OM
ANAG
EMEN
TLuciano Iannuzzo
PARTNERPLANNING AND CONTROL
ANALYSTLuigi Cupelli
SENIOR ANALYST
Marco PignoloniINFORMATION TECHNOLOGYINTERNAL AUDIT
ACCOUNTING AND HR
Antonio Conforti
LEGAL AND CORPORATE
P&C ANALYST
Alessio Iodice
BUSINESS DEVELOPMENT
E. Firmani
UNDER SELECTION
ACCOUNTANT
July 2018 14Company Profile
Board of Statutory AuditorsSupervises compliance with the law and the Articles of Association, inaccordance with the principles of proper and careful administration andparticularly the adequacy of the organisational, administrative and accountingsystem adopted by the company and its actual operation.
Arpinge was established with governance principles inspired by the best international experience, subject to regulation and supervision, operating in theasset management sector. The company’s main credentials include: independence in the management sphere, full transparency and traceability ofdecision-making processes, analyses and decisions marked by professionalism and consensus, and structured control mechanisms.
Board of DirectorsComprising four directors, including the Chairman, the Board of Directorsdetermines the objectives and general strategies for the company’smanagement, investment policies and sectoral priorities and approvesinvestment and disinvestment operations.
Valerio Bignami
Chairman
Cristiano Cremoli
Board Member
Pier Giorgio Cempella
Chairman
Massimo Cavallari
Standing Auditor
Governance
Federico Merola
Managing Director
Claudio Guanetti
Board Member
Giuseppe Grazia
Standing Auditor
Investments CommitteeComprises the Managing Director, Senior Partners, Proposer Partner andtwo independent members, selected by proven experience in theinfrastructure and/or real estate sectors.
Technical body with an advisory function, the Investments Committeeconducts joint, technical assessments of conformity between theoperations and the investment and management policies and strategiesdefined by the Company’s Board of Directors, taking into account thedifferent risk/attention areas pertaining to the management choices.
Giovanni Canepa
Independent Member
Marco Cecchi de’ Rossi
Independent Member
Supervisory BodyIndependent and autonomous body which supervises the correctapplication of the Organisation, Management and Control Model pursuantto Italian Legislative Decree 231/2001, governing the company’s liability foroffences committed in its interests by senior management or employees,and oversees its application.
Auditing FirmFor the first three-year period, to KPMG.
July 2018 15Company 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.
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.
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): 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 M&A in the power & gas andrenewables sectors, accrued through 13years 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 F2i SGR’s portfolio
Luciano Iannuzzo - Partner and Head of Planning and Control
At Arpinge since 2018.
Previously worked for the ING Group in Amsterdam and Paris.
She was appointed Risk Manager of the JP Morgan’s Equity UCITS Fundstructure in London.
She worked, as senior analyst, in the Risk Management team of theItalian Clearing House (CC&G), part of Borsa Italiana (London StockExchange Group).
Formerly Risk Manager of Fabrica Immobiliare SGR.
Elham Firmani– Head of Strategy & Business Development
July 2018 16Company Profile
Management Team
Marco Pignoloni Senior Analyst
Luigi Cupelli Analyst
Alessandro Labellarte Project Manager Parking
Raffaele Pizzorusso Project Manager Energy
Tania Sanna Responsabile Amministrativo
Antonio Conforti Legal Counsel
Lorenzo GinesiAccountant
PROJECT MANAGER
ACCOUNTING
LEGAL
INVESTMENT TEAM
Alessio IodiceController Analyst
April 2018 18Company Profile
Investment Trend
The investment curve is expected to grow over the time
90
51
34
3
70
3411
2014 20162015 2017
0
Commitment
Investments
Allocation @Apr-2018Investments & commitment Arpinge (€M)
PV solar
Energy Efficiency
Wind
Hydro
Parking
20%
40%9%
16%
15%
157 M€Asset Value
26%
29%16%
3%
26%
90 M€Equity Value
Other sectors under analysis.
Energy EfficiencyParking & Urban Mobility Clean Energy
July 2018 19Company Profile
Portfolio – Parking & Urban Mobility
≈ 3.600 car spaces
Concession up to 2050
≈ 3 Mln€ in turnover
Goito car park
Kennedy car park
Abbeveratoia car park
Toschi car park
7 car parks
The company manages all off-street parking facilities in the city centre of Parma
Stable cash flows for over 10 years; 2,7 M€ of dividends in the last 2 years
Gespar Spa
July 2018 20Company Profile
Portfolio – Clean Energy
Solar
Assets: 8 plantsTotal Power: 11.8 MWLocation: Abruzzo/MarcheStatus: OperatingAcquisition date: 2015-2016-2017Asset Life: 25 years
HydroGreenfield
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
Arpinge has invested in all three major renewable energy sources, leveraging on a high internal management capability
and developing increasing returns
July 2018 21Company Profile
Portfolio – Energy Efficiency
13 Conad stores
In portfolio since 2015
≈ €25 m capex
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.
A greenfield project with stable cash flows, no costruction delays and no cost overruns
EPC CONTRACTOR
O&M CONTRACTOR
STORES
ProjectFinancing
O&M Contract
EPC Contract
58%
Ecosaving Srl
Patronage
Fee
Service Contract
40% 2%
Ecosaving Srl