Patrizia has reached almost €1 bn of equity commitments for its Smart City Infrastructure Fund after the latest round of commitments.
The German real assets investor agreed an extra €200 mln from Dutch asset manager APG on behalf of its pension fund client, ABP.
That takes total equity commitments to €950 mln and as much as €1.4 bn when counting a $500 mln co-investment side-car vehicle.
ABP’s new investment is aimed at expanding the fund’s Italian smart streetlighting platform, following the acquisition of three smart street lighting companies in Italy, and its smart city division.
It has taken Patrizia a little less than six years to reach this point having launched the vehicle in November 2018 as one of the first funds globally to target what it calls an emerging asset class.
So far it has put €750 mln of equity to work for investments across Europe and North America.
In the US, it has invested in five co-called FiberCity projects to provide fibre connectivity to small and medium-sized communities. In 2022, the fund diversified its portfolio with its first investments in Europe following the acquisitions of Italian smart streetlighting companies, Ottima and Selettra.
Earlier this year, Patrizia’s Italian streetlighting platform grew further with the acquisition of an 85% stake in Atlantico - Italy’s third-largest independent smart streetlighting operator by number of light points managed.
Jose Martinez Artiles, investment director at the firm’s infrastructure arm, who manages the Italian smart streetlighting platform, said: ‘Our smart streetlighting investments and smart city bolt-on acquisitions in Italy continue to go from strength to strength.’
It has built contacts with numerous Italian municipalities wanting smart streetlighting, which has said was from a financial and environmental perspective.
‘I’m delighted that APG want to increase their investment in this segment and entrust us to deliver returns which will also boost municipalities and citizens alike.’
Smart streetlighting is a significant contributor to the European Union’s policy objectives on energy efficiency and reduction of carbon emissions. By upgrading their streetlights with the latest LED technology, towns can achieve energy savings of over 60% and minimise harmful substances from their communities, such as ultraviolet radiations and CO2 emissions.
Graham Matthews, co-head of fund management and head of fund management infrastructure and chair of its Smart City Infrastructure Fund, said: ‘We are starting to see the convergence of infrastructure, real estate and technology.’
‘We are seeing the concept of RE-infra come to life. We are excited to be building on our strong relationship with APG to facilitate a widening of our smart city strategy. Smart city solutions are playing an important role in improving the efficiency and sustainability of the world’s cities as they respond to key challenges, including continued urbanisation, digitalisation and the energy transition. Ultimately, smart cities will improve the daily lives of people across the world and help strengthen communities, and we are excited to grow our smart city footprint in Italy.’
