Smart city investment fund PATRIZIA Infrastructure is acquiring an 85% stake in Atlantico, Italy’s third-largest independent smart street lighting operator by number of light points (LPs) managed. The acquisition expands PATRIZIA market share in the Italian smart street lighting sector, with a combined commitment of EUR 260 million that also includes investments in Ottima and Selettra in 2022.

PATRIZIA’s portfolio represents the second-largest independent street lighting operator in Italy by number of light points managed across 200 municipalities, with the potential to manage up to one million LPs within the next five years and become a top national player.

The larger platform delivers greater geographic diversity of LPs, with Atlantico providing strong exposure in the north of Italy. The platform’s growth will be further accelerated by bolt-on acquisitions and the deployment of additional smart city services in municipalities, such as smart building management, fleet electrification, 5G, smart meters and smart traffic services.

Established in 2012, Atlantico has a substantial portfolio that has the near-term potential to expand to over 550,000 LPs by 2026 as the result of being awarded large-scale public lighting concessions in most regions across Italy.

In addition to public lighting, Atlantico has businesses specialising in the energy efficiency of public buildings, project finance for energy service company contracts and solar PV projects. It manages a portfolio of more than 500 public buildings that have transitioned into smart buildings, as well as EV charging stations for 100+ waste collection boats. Finally, it is currently developing a 1MW PV plant and reviewing 23.5 MW of additional projects for industrial clients’ facilities.

Matteo Andreoletti, Head of Infrastructure Equity, Europe and North America at PATRIZIA, said: “Our acquisition of Atlantico is highly complementary to our smart cities portfolio and is a strategic investment for accelerating the growth of our street lighting platform. With much greater scale and market share, we can leverage our access to debt and innovative smart city solutions to really drive the future value and investment opportunities within the platform. As a sector, we have high conviction in smart street lighting as it is central to the urban and energy transitions shaping our economies, while also offering our investors core infrastructure exposure that provides attractive risk-adjusted returns and inflation protection.”

The investment in Atlantico means PATRIZIA’s Smart City Infrastructure Fund has now fully committed its EUR 750 million capital to smart city projects across Europe and North America. In the US, the fund has invested in five FiberCity projects in partnership with SiFi Networks that will deliver high speed fibre connectivity to  small-medium sized communities across America. In 2022, the fund diversified its portfolio with its first investments in Europe following the acquisitions of Italian smart street lighting companies Ottima and Selettra.

Graham Matthews, CEO of PATRIZIA Infrastructure and Chair of PATRIZIA Smart City Infrastructure Fund, comments: “We are living in a world in transition where digital infrastructure and new technologies are disrupting the way we live, work and do business across the globe. This digitalisation megatrend continues to create highly attractive opportunities for investors looking to capitalise on infrastructure assets delivering long-term resilient income alongside positive social impact within communities. The success of our smart city investment programme underlines our commitment to driving the digitalisation of our economies and unlocking value for our investors through innovative smart city solutions.”