Whitehelm Capital: The manager with a smart strategy

Whitehelm Capital has Dutch investor APG on board for its Smart Cities Fund. Christopher O’Dea reports 

Whitehelm Captial, backed by APG, is leading a bold effort to make cities smarter – and one outcome could be parking spaces smart enough to tell a digital app that they are empty and available. 

The technology has already been proven to reduce space-searching times in Johannesburg and San Francisco, according to the global consultancy McKinsey. Such a service can show drivers the nearest parking spot – saving time and fuel, thereby reducing auto emissions and increasing the efficiency of journeys. 

Akin to e-commerce systems that push sales messages to consumers when they are in or near certain retailers, a parking-spot locator would use location-based data to connect drivers to available parking. But as part of a city’s transport infrastructure, instead of just selling, smart technology would create a new function to help increase efficiency, improve the quality of life and make cities more sustainable.

Enabling such ingenious improvements to city life is the goal of the Smart City Infrastructure Fund. The fund was established in November 2018 by Dutch pension fund investor APG and Whitehelm Capital, the global infrastructure investment firm Matthews founded 21 years ago in Australia. 

The Smart City fund, the first of its kind, provides long-term capital for infrastructure projects that integrate multiple information and communications technologies and sensor-enabled Internet of Things (IoT) solutions in a secure fashion to manage a city’s assets and processes. 

Smart City fund has announced a $75m (€66.2m) investment to support the roll out of the largest privately funded, open-access fibre network in North America, in Fullerton, California. Working with SiFi Networks America, the network will significantly upgrade internet speeds and accommodate a growing demand for data from next-generation devices in households and businesses, and provide the backbone for digital enhancements to traffic control, street lighting and emergency services.

graham matthews

Graham Matthews

“Smarter cities are more efficient, people are connected more, and we’re trying to improve the quality of life of citizens of the cities through that connectivity,” says Matthews. The goal of the fund is to “provide the capability to invest in any infrastructure that provides the backbone for Smart Cities applications. We’re quite agnostic about how we provide that backbone capability in terms of technology and the way we do it physically, but it’s all about providing connectivity for cities to make them smarter.”

That new fibre-optic network illustrates a fundamental shift in how city planners and investors think about infrastructure. 

“Historically, infrastructure has been about building something big, and then having people go to that big asset, or building networks connecting people to the services of that big asset,” Matthews says. “But increasingly, infrastructure is becoming distributed, it’s becoming a large number of smaller units.” 

Autonomous vehicles, for example, garner significant attention – after all, most people drive – but it is not just self-driving cars that offer the potential to increase efficiency and reduce waste. Self-driving trains, buses, shuttles and services such as autonomous-vehicle taxi service Waymo launched in Phoenix, Arizona in December 2018 can all enhance connectivity.

Even bigger benefits could accrue from managing vehicle and pedestrian traffic by connecting intersections, traffic signals and crosswalks into a mobility grid, using various sensors and IoT technology. McKinsey estimates such seamless mobility could increase transportation capacity in a city by about 30%.

To get the biggest bang for the buck, McKinsey advises cities to focus investment on smart infrastructure to harness the connectivity and intelligence of existing and emerging technologies, rather than building new roads or other traditional assets. After all, McKinsey notes, only about 10% of road capacity is being used, so building more will not solve problems like congestion.

“Historically, infrastructure has been about building something big, and then having people go to that big asset, or building networks connecting people to the services of that big asset. But increasingly, infrastructure is becoming distributed, it’s becoming a large number of smaller units” - Graham Matthews

With $250m in capital commitments, the Smart City fund is just a down payment on a digital buildout that is likely to take years. Whitehelm spoke with 80 cities across the world in the six years it took to develop the strategy, Matthews says, and has fielded a steady stream of inquiries since the Fullerton project was announced. 

“A smart backbone can allow a city to do some really interesting things,” Matthews says. “Rather than having your council trucks driving around emptying waste bins that are mostly empty, you can have sensors on waste bins so that the trucks prioritise emptying of the full bins. 

“For public safety, if you needed an emergency-services vehicle to get from point A to point B, you can have a sensor on the emergency-services vehicle connect to the traffic-control system, so the driver gets a run of green lights the whole way through as part of the emergency response.”

While most drivers would welcome a smart-city app that would eliminate the wheel-clenching frustration of searching for a parking spot, the technology itself is ultimately not the star of the story. “It’s all about improving the quality of life,” says Matthews, “making things more efficient, and making cities better places to live.”

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