InfraRed Capital Partners Raises US$1.2bn for InfraRed Infrastructure Fund III
InfraRed Capital Partners, which invests in and manages infrastructure and real estate assets globally, is pleased to announce the final closing of its InfraRed Infrastructure Fund III (the Fund or IIF3). Despite the challenging fundraising climate, the Fund received equity commitments of just over US$1.2bn from a broad range of investors, exceeding the fundraising target by over US$200m. This makes it the largest fund ever raised that solely focuses on “greenfield” infrastructure.
This release does not constitute an offer to sell or a solicitation of an offer to buy interests of the Fund (the interests) in the United States or any other jurisdiction. The Interests have not been registered under the U.S. Securities Act of 1933, as amended (the Securities Act) or the securities laws of any state or other jurisdiction, nor is such registration contemplated, and the Interests may not be sold in the United States absent registration or an exemption from registration under the Securities Act. The discussions set forth in this release do not purport to be complete and are subject to and qualified in their entirety by reference to the private placement memorandum, limited partnership agreement and all other documents relating to the Fund.
Completion of the fundraising comes 6 months after InfraRed Capital Partners’ spin-out from HSBC. Prior to independence of the business, approximately half of the commitments had been raised from a small group of predominantly existing investors. Following the buy-out, further support was secured from both existing and new investors consisting of a broad range of international pension funds, insurance groups, fund of funds, trusts, associations and other institutional investors.
The firm’s infrastructure investment team has a long established and successful track record, comprising over 50 PPP greenfield infrastructure investments and a total capital expenditure in excess of US$20bn. The team has refined its skills over more than 15 years in sourcing high quality investment opportunities and managing assets through their construction and early operating phases.
Consistent with the strategy adopted by the team when it was initially established in the mid-1990s, IIF3 focuses on PPP projects, including social and transportation infrastructure, with limited revenue risk. During the last 10 years, in response to the globalisation of the PPP model beyond the U.K., the team expanded its geographic remit by teaming up internationally with its construction and FM business relationships. Continuing that trend, IIF3 will invest in opportunities in developed markets possessing robust financial and legal frameworks, namely North America, Europe, Singapore, Hong Kong and Australia. To date, in excess of US$400m of the Fund has already been committed to projects including the Singapore National Sports Hub; the Royal Canadian Mounted Police Headquarters in British Columbia; the expansion of the A63 autoroute in France; and the New Royal Adelaide Hospital in Australia.
The Fund aims to generate value principally by managing new assets through their design, construction and early operating phases, and by enhancing existing infrastructure assets, rather than through financial engineering or favourable market movements. The Fund is a private equity fund which seeks to achieve capital gain for its investors from the realisation of assets once they have completed construction and have a proven and stable operating record. The Fund is currently actively developing and converting its investment pipeline across social, rail and road infrastructure projects in Europe, North America and Asia Pacific.
Werner von Guionneau, Chief Executive Officer of InfraRed Capital Partners said:
“We are very pleased to have exceeded our original target of US$1bn, particularly given the challenging fund raising environment. We are grateful to our investors for the confidence in us, as a team, to deliver this Fund as successfully as its predecessors. Completing this fund raising is an important strategic milestone for our business following the buy-out from HSBC six months ago and we are delighted to have received such a strong endorsement of our value-add business model from existing investors and from many new investors alike.
"The opportunity for privately funded infrastructure investment in developed economies is very substantial as governments around the world look to the building of new, or the improvement of existing, infrastructure to spur economic growth. With our strong track record and disciplined and consistent value-add approach, we will capture many opportunities and are well placed to deliver strong performance for our stakeholders including both public sector clients and our investors.”