GIP: World Bank Pres­i­dent Kim’s next call

... chaired by Nige­rian

Business Day (Nigeria) - - NEWS - EN­DURANCE OKAFOR

Aday af­ter World Bank Group Pres­i­dent Jim Yong Kim’s shock res­ig­na­tion from the bank, Global In­fra­struc­ture Part­ners (GIP), a pri­vate eq­uity fund that in­vests in projects in wealthy and de­vel­op­ing coun­tries, an­nounced that he will be join­ing the com­pany as a part­ner ef­fec­tive from Fe­bru­ary 1.

“The op­por­tu­nity to join the pri­vate sec­tor was un­ex­pected, but I’ve con­cluded that this is the path through which I will be able to make the largest im­pact on ma­jor global is­sues like cli­mate change and the in­fra­struc­ture deficit in emerg­ing mar­kets,” Kim said in a state­ment.

Businessday sur­vey of the New York-based firm re­veals that it was the leader of a con­sor­tium of in­vestors that bought London’s Gatwick air­port for £1.5 bil­lion in 2009, and last month the group sold a ma­jor­ity stake in the air­port to the French in­fra­struc­ture com­pany, Vinci, at an eq­uity value of just un­der £6 bil­lion, just days af­ter the hub was shut­tered for sev­eral days over sight­ings of drones.

In 2012, GIP ac­quired the Ed­in­burgh Air­port for £807 mil­lion, and since then the firm has made a cross sec­tion of in­vest­ments in other ar­eas of the trans­port sec­tor as well as the nat­u­ral re­source and power gen­er­a­tion ar­eas of the en­ergy sec­tor. These in­clude sea­ports, freight rail fa­cil­i­ties, mid­stream nat­u­ral re­sources and power gen­er­a­tion busi­nesses.

Global In­fra­struc­ture Part­ners has in­vest­ments around the globe. Businessday sur­vey of the list of in­vest­ments on GIP’S web­site re­vealed the PE firm has 29 stated as­sets it has put in funds. These in­clude London City Air­port, lo­cated close to London; Great Yar­month Port com­pany, sit­u­ated in east coast of Eng­land; East In­dia Petroleum Lim­ited, lo­cated in In­dia; Chan­nel View, lo­cated in Texas area in the US; Port of Brisbane, in Aus­tralia, among oth­ers.

GIP has also raised funds, and in

May 2008 it com­pleted its GIP I, its first fund, with $5.64 bil­lion in in­vestor cap­i­tal com­mit­ments. The fund be­came fully in­vested dur­ing 2012.

In Septem­ber 2012, GIP’S sec­ond fund (GIP II), com­pleted fundrais­ing with $8.25 bil­lion in in­vestor cap­i­tal com­mit­ments, mak­ing it the largest in­de­pen­dent in­fra­struc­ture fund in the world at that time. Ex­ceed­ing what it had ini­tially pro­jected, GIP’S third fund, GIP III, com­pleted fundrais­ing in Jan­uary 2017 with ap­prox­i­mately $15.8 bil­lion in in­vestor cap­i­tal com­mit­ments.

The more than 12-years-old firm em­ploys ap­prox­i­mately 150 in­vest­ment and op­er­a­tional pro­fes­sion­als and has of­fices in New York, London and Syd­ney with op­er­a­tional head­quar­ters in Stam­ford, Con­necti­cut, USA. In the ag­gre­gate, its port­fo­lio com­pa­nies em­ploy ap­prox­i­mately 21,000 peo­ple, as com­piled from Businessday sur­vey.

Led by Ade­bayo Ogun­lesi, a Nige­rian-born lawyer and for­mer Credit Suisse in­vest­ment bank­ing head, GIP last year be­gan rais­ing money for a po­ten­tial $20 bil­lion fund, just a year af­ter rais­ing a record-break­ing $15.8 bil­lion ve­hi­cle, much of it ear­marked for as­sets in the en­ergy and trans­port sec­tors.

Kim’s po­si­tion as the vice chair­man of GIP will make him the num­ber two most im­por­tant staff of the com­pany af­ter Ogun­lesi, who is the chair­man and man­ag­ing part­ner of the firm.

Ac­cord­ing to peo­ple fa­mil­iar with the mat­ter, Kim’s de­par­ture for GIP took shape around the time of the G20 sum­mit in Buenos Aires, less than two months ago, when con­ver­sa­tions about the new po­si­tion heated up.

A ma­jor con­cern for the World Bank now would be sourc­ing a re­place­ment for Kim, cou­pled with the fact that the Bank also wants to sep­a­rate him from pos­si­ble con­flicts of in­ter­est, con­sid­er­ing his job role at GIP is al­most the same as the core busi­ness of World Bank – lend­ing to build in­fra­struc­ture such as power, wa­ter and trans­porta­tion projects.

How­ever, Kim ac­cepted a oneyear cool-off pe­riod dur­ing which he will be barred from do­ing busi­ness with the or­gan­i­sa­tion he has led since 2012.

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