Infracapital, the infrastructure investment arm of M&G Investments and parent Prudential plc, has reached a final closing of its latest fund, Infracapital Partners II, with total commitments of GBP1.0 billion (USD1.6 billion).
Co-investment pledges take the total investable funds to over GBP1.3 billion. As with its predecessor, Infracapital Partners LP, the fund’s strategy is to invest in, and actively manage, core infrastructure assets across Europe.
The fundraising, which exceeded its initial target, received strong backing from existing investors and in addition welcomed a number of new investors from across Europe, North America and Asia. In addition to seed capital from Prudential, which continues its commitment to the infrastructure sector, the offering appealed to a mix of pension funds, asset managers and other insurance companies, which continue to seek the attractive qualities infrastructure investment can bring, notably long-term investments and steady predictable yield.
Infracapital is well advanced in building the fund’s portfolio having already invested over GBP350m in three companies, Affinity Water, the only UK water-only company to have its regulated business plan fast-tracked by Ofwat; Falbygdens Energi, a Swedish district heating and electricity distribution company; and Calvin Capital, a leading UK smart-metering business.
Martin Lennon, co-founder and head of Infracapital, says: “We are very pleased to have achieved a final close in excess of our target and I want to thank our investors, both new and old, for their support of our team and investment strategy. We believe their commitment recognises our significant experience in both sourcing investments and active asset management and further validates our targeted strategy and prudent approach to delivering strong yield and attractive returns.”
Atlantic Pacific Capital acted as placement agent and Clifford Chance advised Infracapital on legal and tax aspects.