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 £1.0 billion (US$1.6 billion).
Co-investment pledges take the total investable funds to over £1.3 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 £350 million 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.
Participating in the infrastructure sector since 2002, Infracapital is a leading European infrastructure investor, with investments in over 30 businesses operating across the utilities, transport, communications, renewables and social infrastructure sub-sectors. Infracapital is a division of M&G Limited, the European investment management arm of Prudential plc. As a long-term owner of assets, Infracapital aims to create value through both its origination andoperational capabilities.Martin Lennon, Co Founder and Head of Infracapital, said:
Ed Clarke, Co Founder and Director of Infracapital, added:
"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.
"The Fund has had a strong start and we are pleased with the companies already acquired, including our first in Sweden. We believe that the European infrastructure sector continues to provide opportunities for us to create value by assisting an agement to develop and enhance their businesses for customers and other stakeholders."