AllianceBernstein scraps two-year-old infra debt team

The US firm is exiting infra debt just as its five-member team, led by Gerry Jennings, was preparing to raise two debt funds targeting a combined $1.5bn.

Two years after poaching senior members of AMP Capital’s infrastructure debt team to start its own in-house strategy, US firm AllianceBernstein has had a change of heart and decided to abandon the sector, PDI sister title Infrastructure Investor has reported.

“Significant changes in the market environment over the last two years have provided institutional investors with a number of attractive risk-adjusted options in the alternative space. We have taken the strategic decision to focus our private credit opportunities in commercial real estate, residential real estate and middle market lending and as such are exiting the infrastructure debt business,” an AB spokesperson said in an emailed statement.

The decision leaves senior AMP veterans Gerry Jennings, AB’s global head of infrastructure; Richard Lane, managing director; and Tim Whishaw, vice-president, looking for a new home, along with fourth team member James Costine, fund controller and ex-Arcus Infrastructure Partners. The debt team’s fifth member was an internal AB product development person and remains with the company.

At press time, neither of the team members could be reached for comment. It is unclear what they will do next and whether they will remain together.

AB’s infrastructure debt team had been raising two European funds focusing on senior and subordinated debt. The senior debt vehicle was looking to raise about $1 billion, with a $1.2 billion hard-cap, to generate returns of between 4 and 6 percent. On the subordinated debt side, AB was aiming to raise $500 million, with a $750 million hard-cap, to net returns of between 6 and 9 percent, according to Infrastructure Investor Research & Analytics.

Both were 10-year funds with 2-year extension options, but neither had reached a first close, though the funds were understood to have garnered significant interest. AB was not investing in either of the funds. In addition, the team was also pursuing a separate accounts strategy, which had also reportedly generated good traction.