Rigorous investment process

IFM applies a rigorous investment process developed and refined over the course of our 18 years of experience investing in infrastructure. Our process is supported by a sophisticated and proprietary portfolio construction methodology known as InFRAME™.

1. Opportunity generation

IFM’s global reach allows our investment teams to draw upon a network of strategic global operators, industry relationships and service providers to identify investment opportunities. Our existing portfolio of infrastructure assets also provides extensive opportunities given the option value embedded via pre-emptive rights and the potential to expand and enhance the assets.

2. Investment screening

To effectively screen potential opportunities, team members undertake a high level, fundamental review of the opportunity. This initial review considers the merits and risks of the opportunity, the expected range of returns and the likely impact that the investment would have on the portfolio. Investment proposals that display attractive risk adjusted returns and would complement the portfolio are presented to an investments sub-committee for consideration.

As part of this assessment, IFM forms a view on its competitive advantages with respect to a potential transaction, and uses its proprietary InFRAME methodology to analyse whether investment in a particular infrastructure sub-sector will progressively enhance its portfolio.

A wealth of senior infrastructure experience

IFM’s rich experience in infrastructure is bolstered by our Senior Infrastructure Advisers, a group of specialist advisers who have a long track record as senior infrastructure executives.

These advisers provide IFM with exclusive expertise on a range of asset management, commercial and investment issues. Their insights and knowledge are invaluable in ensuring our infrastructure businesses are world class when it comes to safe, profitable and sustainable operations. Details of our senior infrastructure advisers are available on request.

3. Detailed due diligence

IFM’s rigorous due diligence processes covers all commercial aspects of a potential investment, including the industry and competitive landscape, regulatory regimes, the asset’s management team, operating characteristics and forecast cash flows. Our investment team’s experience enables us to identify and accurately assess potential risks associated with an acquisition, proposed financing requirements, expected returns and legal and tax considerations. IFM is also able to draw upon the expertise of our Commercial Group to provide tax, legal and structuring advice. We also engage independent expert external consultants where appropriate to validate or inform internal assessments.

Peer review and responsible investment considerations

IFM subjects all investment proposals to an extensive peer review from a team based in an office not directly involved in the investment. All aspects of a transaction must be defended and survive rigorous scrutiny.

Each deal team includes an Investment Director whose responsibility is to identify and analyse risks. This Investment Director does not participate in other aspects of the transaction. In addition, IFM’s Director, Sustainability and Responsible Investment, monitors the review of responsible investment matters during the due diligence period. More than 100 discrete questions related to ESG are considered during this phase.

4. Investment decision

IFM’s Investments Committee and IFM’s Board Investment Committee (as required) review investment recommendations for approval. Investment proposals, accompanied by an evaluation of the deal’s merits and its impact on the infrastructure portfolio, are typically presented to the Committees at multiple stages of the due diligence process so that early feedback can be incorporated.

5. Ongoing investment management

Active asset management is fundamental to IFM’s approach. Every investment recommendation includes a comprehensive business plan that details the strategic, financial, operational and ESG considerations that must be managed after the close of a transaction. Through this process, IFM ensures that investment directors and board representatives are well prepared to oversee the asset from the day the deal is closed.

6. Post transaction review

At the conclusion of each transaction, the team provides an analysis of the investment process, due diligence and investment outcome to the Investment Committee to capture learning opportunities for continuous improvement.