Welcome to the leisuredome

Just when you thought you’d written your last story on stretching the definition of infrastructure because it’s all getting a bit old hat… Antin IP takes it up a notch by acquiring a French “leisure infrastructure” company.

Yup – we’re back here again – celebrating the latest wheeze by a fund manager as it shoehorns something that’s 100% not infra into an infrastructure vehicle.

Antin – through its Antin Infrastructure Partners Mid Cap I – is to acquire Belambra, France’s answer the UK’s Center Parks, similar to holiday camps across the US, or the likes of Camp Australia… you get the picture.

According to the Antin press release: “Belambra is a leading French operator of all-inclusive holiday clubs. Founded in 1959 and owned since 2014 by CARAVELLE, Belambra’s holiday clubs benefit from large infrastructure and common areas, and provide a full-service offering including accommodation, food, activities and sports.”

It gets better. The press release informs us that Belambra “highlights many strong and appealing infrastructure features” and – if you squint – it’s kinda infra-like as it has a “high-quality portfolio that is difficult to replicate due to the scarcity of such prime site locations”… implying barriers to entry.

This infra characteristic is immediately contradicted as Antin plans to accelerate Belambra’s growth, “increasing asset ownership and pursuing further growth avenues such as new site openings, in line with its track record of scaling companies”.

So – not quite such a protected area of business as you’d like us to think.

Two go in… one comes out

Reaching out the infra community this week – having fielded a couple of calls from those aghast at Antin’s audacity – and the response was pretty much as expected – though some think it’s genius.

“Sacrebleu” cropped up more than once from those who had not heard the news… swiftly followed by demanding to know: “Where are the predictable cashflows and barriers to entry?” This was joined by: “It’s not even great for an Antin corporate getaway.”

One was unkind enough to riff off the French penchant for taking luxurious summer holidays: “It's perhaps a diversification strategy to bring in income in August each year when France otherwise shuts down.”

And there are the infra credentials: “As an investor, if I want exposure to property rents… I'd buy a REIT, no? It's all symptomatic of too much money looking for too few assets.” This is followed by: “Transition funds were/are the same. Imaginative leaps of the mind to the twilight zone to justify fees.”

Another source of the infra persuasion says: “It’s bullsh*t that holiday camps are even considered for investors. It’s not contracted revenue, there are low barriers to entry, there is no guaranteed inflation linkage. I get it in a real estate fund, but it’s beyond stupid in an infra fund.”

Said source ramps it up: “I think regulators should take note – top tier funds chasing deregulated businesses for predictability instead of regulated ones… trust broken?”

Some like the leisuredome

For all the detractors, there are many folk in the market tipping hats to Antin, celebrating clever deployment of capital… and some even have suggestions for what to do next.

This one is very much in favour of holiday camps: “I think you can justify virtually anything these days as ‘infrastructure’. It’s an essential service provider – if you’re the dad of 2 small kids at half term! It has brick and mortar assets and some level of contractual cash flows. Hey presto it’s infra.”

However, this source mulls the motivation: “Methinks the real reason might be someone spending so much time over half term with the kids at Belambra that the old adage of ‘if you can’t beat ’em, join ’em’ kicked in. And maybe owner’s discounts for future visits are nothing to sneeze at!”

Meanwhile, yet another supports the move: “If ski lifts (icon infra), fishing vessels (Antin again), temporary traffic light operators (SRL – 3i) can be infra, then why not holiday camps?

“They serve a basic need for holidays – especially when they are in France – barriers to entry do exist as land is scarce… I could go on. So, it’s a no brainer. Hats off to Antin for thinking through that one.”

But this prompted some thoughts on what next… and this brought to the source’s mind “dog day care businesses” which “meet all the requirements” and “even have an emotional connection”.

This infra grandee adds: “Seeing my dog reminded me this has potential. The day care is always busy and fully booked, and it keeps increasing prices without competition. Frankly, it sounds like a monopolistic, essential infrastructure business.”

Conspiracy theory

And then there’s the infra conspiracy theorist who detects the invisible hand behind Antin’s acquisition in a dastardly manoeuvre to get deals over the line.

The suspicious contact says: “I think this is a really clever ruse to reach close on all their other investments more quickly than their competitors.”

The infra veteran expands: “When I was a child only schoolchildren took half term holidays and amused themselves riding chopper bicycles and buying individual cigarettes from less scrupulous newspaper shops.

“But these days all their parents take half term to supervise the children… meaning you can’t get meetings with all of your advisers and counterparties to close issues outside of term time.

“Antin will have all of its counterparties in its holiday camp, so while the kids are water-sliding the financial adviser parents can be water-boarding any lender parents who won’t accept that 100% synergy additions to weather-adjusted EBITDA is now ‘market’ on build-it-and-they-might come fibre networks (if your building contractor hasn’t already pissed off the whole village of potential customers living in ‘homes passed’ by the manner in which they dug up the roads while laying said fibre and accidentally cutting off the water/gas/electricity and causing parking and traffic problems).”