Infrastructure Finance

Infrastructure Investing

Remediating America’s crumbling infrastructure has proven to be a very costly undertaking.  With many governmental entities struggling just to make ends meet, funding assistance from different sources is in high demand. These are the market dynamics that led to the creation of Rice Asset Management, LLC, a private equity fund focused on restoring America’s infrastructure primarily through participation as a consortium member investing in P3 infrastructure projects in North America.

Rice Asset Management is built upon a longstanding foundation of municipal finance expertise.  Our parent, Rice Financial Products Company, was founded more than 25 years ago.  The firm is a leader in municipal finance, involved in over 10% of all state and local infrastructure finance in the United States.  Rice Financial’s technical experience structuring and selling debt for governmental municipal infrastructure borrowers means we have the technical expertise required to understand and analyze major infrastructure projects. Similarly, our decades-long experience successfully competing for underwriting and investment management assignments from these same municipalities means we thoroughly understand governmental procurement processes.

Investment Approach

Rice Asset Management’s primary objective is to invest in Core and Core-Plus P3 Infrastructure projects in North America.

“Core Infra” projects typically have stable operating assets with most, if not all, of the return coming from cash dividends. Examples include interstate bridge (non-toll) repairs, urban greenspace and sidewalk/lighting improvements.  These projects are generally financed by payments from a governmental entity rather than a direct revenue stream.

“Core-Plus Infra” projects are somewhat riskier.  They include operating assets with some growth story or growth/expansion capex. These types of projects include airports, rail, bridges, utilities and parking facilities.

Targeting primarily greenfield investment opportunities, Rice Asset Management is focused on assets that are supported by strong market demand, under long-term contract with creditworthy counterparties, within concession-based structures or under a regulated framework.  The firm concentrates on the following characteristics when evaluating investment in an infrastructure project:

  • Income. A major component of total return is yield due to the typically stable and mature nature of infrastructure assets.
  • Steady Returns. Infrastructure assets often have a monopolistic profile that can reduce cashflow volatility.
  • Drivers of return and value for core infrastructure are often different from other asset classes.
  • Inflation Protection. Many contracts and regulatory structures provide for the pass-through of inflation.
  • Compatible Long-Term Liability. Many investors can match their long-term liability with infrastructure assets due to their long-lived nature.

Target Assets

Rice Financial has been structuring and underwriting municipal bond transactions for more than two decades, and the P3 projects we are targeting are in these same areas of infrastructure.

  • Social Infrastructure: Higher Education Facilities, Justice and Emergency Services, Hospitals and Healthcare Facilities, Municipal Buildings 
  • Transportation Infrastructure: Roads, Bridges, Railways, Mass Transit, Airports, Ports, Parking 
  • Utility Infrastructure: Water, Gas, Public Power, Energy Efficiency, Fiber Optics, Telecommunications

Capital Available for Investment

Rice Asset Management’s goal is to obtain minority participation in multiple P3 projects with the ability to invest upwards of $250 million into any single project. As an MBE certified firm, the inclusion of Rice Asset Management in these projects brings desired diversity to the investment in, and ownership of, the project.  Many of these projects are in highly urban areas where leaders have mandated minority participation.

Contact

Kevin Schuyler
Managing Director
(212) 908-9207
kevin.schuyler@ricefin.com