Principal® Announces Launch of New Private Infrastructure Debt Capability Aimed at Providing Safety, Stability, and Enhanced Returns Amidst a Constrained Financing Market

Rhea-AI Summary

Principal Asset Management announced the launch of a new private infrastructure debt capability. This initiative aims to provide safety, stability, and enhanced returns for investors amidst constrained financing markets.

Mansi Patel, appointed as senior managing director and head of infrastructure debt, will lead the operations, growth, and strategy of this new venture. The new capability will invest in a diversified portfolio of private infrastructure debt focusing on globalization, decarbonization, and electrification.

This investment strategy promises higher risk premiums and lower default risk compared to public market sector equivalents. Patel will report to Todd Everett, global head of private markets at Principal Asset Management.

Positive

• Launch of a new private infrastructure debt capability to provide safety, stability, and enhanced returns.
• Appointment of Mansi Patel, an industry veteran, as senior managing director to lead the initiative.
• Targeted thematic investments in globalization, decarbonization, and electrification.
• Higher risk premium and lower default risk compared to public market sector equivalents.
• Opportunity to fill the financing gap left by constraints in traditional bank funding.
• Access to defensive cash flows and exposure to critical investment themes.

Negative

• The PR does not provide specific financial projections or initial performance expectations for the new capability.
• Potential risks associated with the integration and implementation of the new infrastructure debt capability.

Insights

Financial Analyst

The launch of Principal Asset Management's new private infrastructure debt capability could be significant for investors, particularly given the current market environment where traditional bank funding is constrained. This new investment avenue is targeting thematic investments in globalization, decarbonization and electrification, which align with long-term global trends. The promise of higher risk premiums compared to public market sectors and consistently lower default risk are attractive features. However, investors should be aware of the inherent risks involved in private infrastructure debt, such as liquidity risk and the long-term commitment typically required for such investments.

From a financial perspective, the capability could provide a diversification benefit to traditional portfolios, potentially offering defensive cash flows and exposure to sectors associated with critical infrastructure developments. For retail investors, this could translate into more stable returns amidst volatile markets. Nevertheless, the actual performance will depend on effective management and the ability of Principal Asset Management to identify and invest in profitable projects.

Rating: 1 (positive)

Market Research Analyst

The introduction of a private infrastructure debt capability by Principal Asset Management is indicative of a broader shift towards private market investments as a response to constraints in traditional bank funding. This move not only provides a unique investment opportunity but also addresses the growing demand for infrastructure development driven by themes such as decarbonization and digitalization. These themes are expected to remain significant for the foreseeable future, which lends credence to the potential long-term viability of this investment strategy.

Furthermore, the focus on lower default risk and favorable debt characteristics could appeal to investors seeking stability. In the current financial environment, where volatility remains high, such attributes are particularly appealing. For retail investors, understanding the implications of investing in private infrastructure debt is essential, as it may provide a hedge against public market fluctuations while supporting sustainable and essential global projects.

Rating: 1 (positive)

Mansi Patel joins as head of infrastructure debt

DES MOINES, Iowa--(BUSINESS WIRE)-- Principal Asset Management℠ today announced the launch of its new private infrastructure debt capability (the capability) and the hiring of Mansi Patel as senior managing director, head of infrastructure debt to lead its launch and implementation. This new capability adds to the firm’s long-standing expertise in public listed infrastructure, real estate debt, and alternative credit.

The capability will focus on investing in a diversified portfolio of private infrastructure debt, targeting thematic investments in globalization, decarbonization, and electrification. By doing so, it aims to generate a higher risk premium relative to its public market sector equivalent, while also benefiting from consistently lower default risk and more favorable debt characteristics to non-financial corporate sectors.

“The launch of our private infrastructure debt capability comes at an opportune time for investors, given the powerful market forces driving tremendous capital needs across all infrastructure sectors,” said Todd Everett, global head of private markets at Principal Asset Management. “Constraints in traditional bank funding have opened the door for private investors to fill the financing gap. This capability will allow investors to access an opportunity set that offers defensive cash flows, lower default risk, and exposure to critical investment themes like decarbonization, electrification, and digitalization.”

In this role, Patel will oversee the growth, operations, and strategy of the newly created private infrastructure debt investment team. Patel brings extensive industry experience, including leadership in origination, underwriting, and portfolio management services, for both affiliated and third-party separate account capital across multiple sectors. Patel will report directly to Everett.

“Private infrastructure debt can play a key role in portfolio construction for institutions and retail investors alike, aiming to offer safety, stability, and enhanced returns,” shared Patel. "This makes it an exciting time to join Principal Asset Management, a leader in innovative and diversified investment solutions, and lead the new private infrastructure debt capability, which will be a compelling addition to the firm's already strong private market lineup.”

About Mansi Patel

Patel joins Principal with nearly 20 years of experience of industry experience. Patel previously spent 18 years at MetLife Investment Management as managing director, head of infrastructure debt and project finance—North America, Latin America, and APAC. Prior to this role, she held a position at PricewaterhouseCoopers. Patel earned a Master of Business Administration at Fairleigh Dickinson University and a Bachelor of Science at Rutgers University.

About Principal Asset Management℠

With public and private market capabilities across all asset classes, Principal Asset Management and its investment specialists look at asset management through a different lens, creating solutions to help deliver client investment objectives. By applying local insights with global perspectives, Principal Asset Management identifies distinct and compelling investment opportunities for more than 1,100 institutional clients in over 80 markets.¹ Principal Asset Management is the global investment solutions business for Principal Financial Group^® (Nasdaq: PFG), managing $545 billion in assets¹ and recognized as a “Best Places to Work in Money Management”² for 12 consecutive years.

[1] As of March 31, 2024

[2] Pensions & Investments, “The Best Places to Work in Money Management”, among companies with 1,000 or more employees, December 12 2023.

©2024 Principal Financial Services, Inc., Principal®, Principal Financial Group®, Principal Asset Management, and Principal and the logomark design are registered trademarks and service marks of Principal Financial Services, Inc., a Principal Financial Group company, in various countries around the world and may be used only with the permission of Principal Financial Services, Inc. Principal Asset Management℠ is a trade name of Principal Global Investors, LLC. Principal Real Estate is a trade name of Principal Real Estate Investors, LLC, an affiliate of Principal Global Investors.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515758839/en/

Erin Parro, 515-878-0130

Source: Principal Asset Management

FAQ

What is the new private infrastructure debt capability announced by Principal Asset Management?

Principal Asset Management has launched a new private infrastructure debt capability aimed at providing safety, stability, and enhanced returns for investors.

Who will lead the new private infrastructure debt capability at Principal Asset Management?

Mansi Patel has been appointed as senior managing director and head of infrastructure debt to lead the new capability.

What investment themes will the new private infrastructure debt capability focus on?

The new capability will focus on thematic investments in globalization, decarbonization, and electrification.

How does the new private infrastructure debt capability compare to public market sector equivalents?

The new capability promises higher risk premiums and lower default risk compared to public market sector equivalents.

Why is the launch of the private infrastructure debt capability significant for investors?

The launch is significant because it provides an opportunity to fill the financing gap left by constraints in traditional bank funding, offering access to defensive cash flows and critical investment themes.