Infracapital, the infrastructure investment arm of M&G Investments, has made an agreement to acquire an 80% stake in a Private Public Partnership (PPP) portfolio from Societa' Italiana Per Condotte d'Acqua S.p.A (Condotte), an Italian construction company.

The portfolio comprises both operational and greenfield assets that will provide core public services in the health, transport and security sectors. The portfolio, with a total capital value of over €700 million (US$783 million), has an attractive risk-return profile, providing institutional investors with predictable cash flows for over 20 years.

The portfolio includes the following assets:

• Citta’ della Salute, a new hospital in Milan due to start construction later this year
• Vimercate Hospital, a hospital located in north of Milan
• Empoli Hospital, a hospital located west of Florence
• Pisa People Mover, a shuttle train service connecting Pisa Airport to Pisa Centrale station
• Careggi, a 10MWe tri-generation energy centre serving Careggi University Hospital in Florence
• Bolzano prison, the first Italian PPP prison due to start construction later this year

Infracapital has also announced that it will work jointly with Condotte to apply best practice asset management and implement synergies across the portfolio. 

Andy Matthews, Greenfield Director, Infracapital, said:

“This transaction provides Infracapital with a high-quality platform of PPP projects in Italy, a country which has successfully embraced the PPP model and offers numerous opportunities in the social infrastructure space. We look forward to working closely with Condotte, one of the most experienced infrastructure partners in the region, to develop these assets and further projects within the Italian PPP market. The deal is indicative of the significant greenfield infrastructure investment opportunity in Italy and across Europe, where we hope to invest further in the coming years.”

Isabella Bruno Tolomei Frigerio, President and CFO the Financial holding company of Condotte, said:

“With the strong demand for PPP projects in Italy and other European regions, we are excited to be working with Infracapital, a leading infrastructure investor, to create a high quality investment platform of scale. We see significant growth potential in healthcare, transport and accommodation PPP throughout Italy and we are well positioned to access these opportunities through this newly established platform.”