IST3 Infrastruktur Global

IST3 Infrastruktur Global: A Swiss Infrastructure Fund Start-Up

IST3 Infrastruktur Global (“IST3”) is a private equity infrastructure investment fund established in 2014 as a Swiss Pension Fund Foundation offering a common platform for Swiss pension funds to pool investments into larger ticket sizes, share expert staff and reduce administrative overhead. The original IST3 Investment Committee (“IC”) had five voting members and one non-voting representative from the oversight board. I was asked to join the initial IC and attended its first meeting in September 2014 in Zurich. At that point IST3 was a true start-up with zero assets, zero staff and 300 million CHF in committed capital.

My role was to contribute gravitas to the start-up, access to my networks in the US market, and insights from my professional experiences.

It was novel for me to view infrastructure finance through the lens of a conservative, international, institutional investor with a buy-and-hold orientation. My prior career was as an advisor to governments at the federal, state, regional and local levels in the US on greenfield transport projects. I learned about a broad array of infrastructure categories and the analytics associated with cash yielding assets such as: the Swiss, PJM and Alberta electrical grids; onshore wind farms in Europe and the US; solar arrays in Germany and Asia; UK water and sewer assets; highway rest areas in Connecticut; educational facilities and a toll road in Ireland; hydroelectric installations on the Iberian Peninsula; natural gas pipelines in Spain, London and Switzerland; data centers in North America, and fiber to the home networks in France and Germany; as well as portfolios of secondary assets that came on the market periodically.

I saw firsthand the unanticipated risks of managing the assets IST3 owned directly – serial wind turbine defects, curtailments, solar panel thefts, and the intricacies of feed-in-tariff regimes and power purchase agreements. I observed how foreign exchange movements, macroeconomic events, the War in Ukraine, and COVID could exert more influence on our returns than the variables within our control. I also witnessed the outcomes of good and bad behavior by regulators and fund managers, experienced the joys (and hard work) of successful exits and the heartbreak of a total loss on a “sure bet” on Southern Water in the UK. IST3’s mandate covered OECD countries, so my parochial focus on the US broadened globally.

I retired from the IC in January 2025 and by that time IST3 had grown to roughly 1 billion CHF in Assets Under Management with a full complement of M&A and asset management staff. Highlights of my tenure involved IST3 backing the winner of the competition to build and operate the Thames Tideway Tunnel (“TTT”), a £4.5 billion sewer tunnel under the River Thames in London that is now in operation. TTT utilized a novel mechanism to allocate construction risk among contractors, private equity and utility rate payers. I was fascinated by the elegance of the financial structure and attempted to adapt the mechanism to complex transport infrastructure in the US.

Another highlight of my IST3 tenure was analyzing an investment opportunity for a secondary portfolio that included the Port of Miami Tunnel, on whose financing and procurement I had advised the Florida Department of Transportation years earlier.

IST3 continues to mature, grow its assets under management and positively influence global infrastructure investment through disciplined analysis, high ethical standards and deep relationships with owners and developers of core infrastructure.