Principal AM unveils infrastructure debt fund

US-based investment firm Principal Asset Management has launched a new private infrastructure debt capability primarily focused on carbon reduction and digitalisation initiatives.

The private debt capability promises access to a diversified portfolio of investments targeting globalisation, decarbonisation, electrification and digitalisation initiatives.

Todd Everett, global head of private markets at Principal, said the capability, in addition to these key investment thematic, also delivers defensive cash flows and lower default risk.

Principal boasts that the capability will generate a higher risk premium relative to its public market sector equivalent, while also benefiting from consistently lower default risk and more favourable debt characteristics to non-financial corporate sectors.

Everett welcomed the launch of the new fund, which he said “comes at an opportune time for investors”.

“Powerful market forces driving tremendous capital needs across all infrastructure sectors.”

“Constraints in traditional bank funding have opened the door for private investors to fill the financing gap.

Principal has also welcomed new appointee Mansi Patel to lead the new capability’s launch and implementation.

Patel, officially appointed Principal’s senior managing director and head of infrastructure debt, will oversee the growth, operations, and strategy of the newly established private infrastructure debt investment team.

Principal hailed Patel’s “extensive industry experience, including leadership in origination, underwriting, and portfolio management services, for both affiliated and third-party separate account capital across multiple sectors”.

She reports directly to Everett.

Patel acknowledged the key role that private infrastructure debt can play in portfolio construction for institutions and retail investors, “aiming to offer safety, stability, and enhanced returns”.

Principal Asset Management is the global investment services arm of the Nasdaq-listed Principal Financial Group, and as at end of March 2023 oversees US$545 billion (AU$819 billion) in assets.