Infracapital closes its first greenfield fund

Infracapital, the infrastructure equity investment arm of M&G Investments, has successfully reached a final closing of its latest fund, Infracapital Greenfield Partners I LP, with total commitments of £1.25 billion (US$ 1,65 billion). This is well in excess of its £1 billion (US$ 1.32 billion) target and in line with Infracapital’s internal hard cap.

Clifford Chance advised Infracapital on legal aspects of the fund raise and Deloitte advised on tax aspects. 

The Greenfield Fund’s strategy is to invest in the later stage development, construction and expansion stages of projects and companies across a variety of sectors including communications, energy, renewables, social infrastructure, transport and utilities. This strategy is expected to generate a premium return profile and is well-suited to meet the liability-matching requirements of pension schemes and other institutional investors.

The fundraising generated a high level of demand from institutional capital, with 85% of the fund committed by pension funds and insurance companies. The fund also attracted new investors from new geographies with 50% of the capital coming from overseas.

As a long-term owner of assets, Infracapital aims to create value through its proven capabilities spanning origination, execution, project delivery and operational enhancement. Infracapital has a dedicated greenfield team, led by industry expert Andy Matthews, that sources and delivers projects and actively manages assets for the Fund.

Infracapital has already committed 43% of the Greenfield Fund in five assets:

• Gigaclear, a broadband developer providing high-speed fibre optic broadband networks to the UK’s underserved rural communities.
• Bioenergy Infrastructure Group (BIG), a UK biomass and Energy from Waste aggregation platform with potential generation capacity in excess of 100 MW.
• C2i, a diversified portfolio comprising five social infrastructure assets in Italy, providing core public services in the health, transport and security sectors.
• Infram Energy, a joint venture with Amarenco Solar to invest in greenfield renewable energy assets across France, Ireland and other European markets.
• A joint venture with Nokia to invest in a Polish government sponsored initiative to roll out broadband infrastructure in the country.

Infracapital expects to close two further projects imminently, taking the fund to over 50% committed by the end of year.

Andy Matthews, Head of Greenfield, Infracapital, said:

“We are delighted with the strong level of investor support we have seen for our first greenfield fund. This reflects the fund’s differentiated strategy of investing in greenfield assets to drive premium returns over the long-term.”

“We have already made a strong start, investing in a diversified portfolio of highly attractive assets, and we see significant pipeline opportunities in the greenfield market, both in the UK and Continental Europe.”

Martin Lennon and Ed Clarke, Co-Founders of Infracapital, said:

“We are one of the first managers to offer investors a dedicated cross sector greenfield fund, building on our excellent track record of investing in and actively managing brownfield infrastructure assets. The significant interest from investors, both existing and new, across the globe is testament to the team’s sourcing capabilities and reputation in the market.”