Montreal-based asset manager Cordiant Capital turned its back on the hottest thing in finance this winter – an SPAC – to launch an old-school, £370-million U.K. fund that plans to buy telecom infrastructure.
The new fund, Cordiant Digital Infrastructure Ltd., listed Monday on the London Stock Exchange. While this is the first publicly traded company created by Cordiant, a 22-year-old firm that also manages private funds, the concept of raising capital on the LSE and then using the money to build or buy infrastructure such as railways or telegraph cable has been around since the 1800s.
Cordiant’s fund, which co-chief executive Benn Mikula said will focus on “the plumbing of the internet,” debuted on the 150th anniversary of an LSE-listed fund called Submarine Cables Trust, which raised money to lay down transatlantic telegraph cables. The new Canadian fund’s investment team includes Steven Marshall, a London-based Cordiant managing partner and former senior executive at American Tower Corp., one of the largest players in telecom infrastructure.
With the fund, Cordiant plans to acquire digital infrastructure such as telecom towers, data centres or storage networks. Mr. Mikula said the stability that comes with an LSE listing makes this fund “permanent capital” for a business, an attractive feature for entrepreneurs looking to sell all or part of their companies to private equity funds.
Mr. Mikula said Cordiant decided the LSE-listed fund was superior to a special-purpose acquisition company (SPAC), because the U.S. approach hands a “significant portion of the equity in the company to the promoters of the SPAC,” he said. “In contrast, the investment trust we’ve launched is a proven, investor-friendly structure.”
Less than two months into this year, promoters have raised US$46-billion by launching 151 SPACs in U.S. markets, after creating 248 of these acquisition vehicles that raised US$83-billion last year, according to the SPAC Insider database.
In contrast, the LSE’s listed fund structure is home to 391 trusts with £234-billion of assets, according to the Association of Investment Companies. Over the past decade, these trusts averaged a 9.4-per-cent annual return.
Cordiant’s publicly traded fund is backed by pension plans, alternative asset managers and wealthy families from Australia, Canada, Switzerland, the U.S. and the U.K. The new fund boosts Cordiant’s assets to more than $3.2-billion.
Cordiant was founded in 1999 as a credit fund, investing in emerging markets debt with backers that included the Ontario Teachers’ Pension Plan. Five years ago, a new management team bought the firm, led by Mr. Mikula, a former JP Morgan and RBC Capital Markets executive; co-CEO Jean-François Sauvé, a veteran of Scotia Capital and Swiss private bank Pictet & Cie; and former Goldman Sachs Canada president James Keirnan, who is Cordiant’s chair. Over the past five years, they broadened the fund manager’s focus into four new sectors: digital infrastructure, agriculture, renewable energy and transport.
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Andrew Willis