Rabo Bouwfonds Communication Infrastructure Fund

The Rabo Bouwfonds Communication Infrastructure Fund ('RBCIF') is a Dutch investment fund that takes a long-range view of its investment in Dutch communication infrastructure, such as transmission masts and cable infrastructures.

By focusing on the quality and positioning of these assets, the fund is able to make the necessary long-term investments that will provide the Netherlands with a future-proof infrastructure for internet, television, mobile and land-line telephony. To achieve this, the fund works closely with telecom providers, big and small.

Nature of the investments
The financial characteristics of the investments the fund intends to make have important parallels with those of traditional real estate, such as providing predictable returns, cash flows and capital appreciation. RBCIF offers opportunities for diversification within its Limited Partners’ investment portfolios, since the returns have a different correlation than, for example, traditional real estate.

The fund will only invest in assets that have at least the following characteristics:

• Predictable cash flows and revenue growth
• Strategic opportunities for additional revenue through the expansion of existing services and/or the addition of new services, making use of existing infrastructure
• High barriers to entry
• The opportunity to acquire a strategic stake so that the fund can determine or at least help to determine important strategic and investment decisions
• Presence of a competent management team

Possible investments made by the fund could be:

- Landline infrastructure such as backbone networks and local access networks (copper, coax and glass fibre)
- Mobile repeater stations and related infrastructure
- Network infrastructure for communication and broadcast services and
- Other communication facilities

Communication Infrastructure Team
In 2007, Bouwfonds REIM engaged an experienced team of industry experts to set up and manage the Fund. The members of the team have extensive experience in and knowledge of the sector and are specialists in financing telecommunication infrastructure, strategy, investment analysis, M&A, operations and legislation.

The investment market for infrastructure funds is currently dominated by funds that spread their investments over several infrastructure sectors, often with a continental or even global focus. The Bouwfonds REIM fund, RBCIF, focuses on a single sector and a single region. Our experience in real estate has taught us that specialist funds are attractive alternatives to the more generic funds.

Within its broad definition of infrastructure, and because the telecommunication market is mature and deregulated, the fund concentrates specifically on investments in communication networks. These market characteristics mean that it is generally easier to assess risks than in other, more recently established infrastructure markets. And besides, telecommunication networks are often less capital intensive than, for instance, transport infrastructure.

The fund is responding to recent technological developments and regulations, which will increasingly lead to the commercial supplier companies being split off from the network companies (as is currently already the case in energy companies). As a result of these developments, the Fund envisages plenty of existing and new investment opportunities for investing exclusively in telecommunication infrastructure.