ASSET-BASED INVESTMENT

INVESTMENT STRATEGY

Overview
Arcapita’s asset-based investment team focuses on infrastructure investment opportunities which generate high quality cash flow and have lower business risk characteristics. Investor returns are derived from the actual cash flow produced by a single asset or a group of tangible assets during the investment holding period, and eventual sale through multiple exit strategies. The intrinsic asset value – which provides enhanced downside risk protection – is fundamental to the investment thesis in these transactions.
 
Sectors particularly well suited to this type of investment include asset-rich industries such as power, utilities, oil and gas, transportation, infrastructure and other regulated industries.

Diversified Yield
The upgrade and expansion of national infrastructure is at the top of the political agenda for many governments in both the developed and developing economies. Governments’ drive to update and expand national infrastructure without burdening the exchequer will require increasing private sector participation. The investment success factors for these transactions are political commitment by national governments, transparent and stable regulatory frameworks, established privatization and liberalization schemes and credible partners and operators. By concentrating on the sectors identified above, most of which are typically resilient to economic cyclicality, Arcapita aims to offer its investors the opportunity to build a diversified portfolio of cash yielding investments to complement its corporate and real estate investment products.
 
Arcapita will continue with its strategy of focusing on opportunities in the more developed markets such as North America and Europe, which offer a supply of the type of assets identified above, while selectively pursuing transactions in other markets.