Aberdeen Standard wraps up deployment of Fund I

The final investment of SL Capital Infrastructure I comes a little over two years after it reached its final close of £516m.

UK-based manager Aberdeen Standard Investments has fully deployed its £516 million ($647.6 million; €580.4 million) SL Capital Infrastructure I fund after the acquisition of oil storage terminal operator Oikos Storage.

The group bought 100 percent of the company from Australian insurance group Challenger Life, which had owned the company since 2007. Oikos Storage owns and operates a liquid bulk storage terminal located on London’s River Thames, handling jet fuel and diesel and transporting to London’s Heathrow, Gatwick and Stansted airports, as well to the UK’s Midlands and south-east regions.

The deal marks the end of the investment period for SL Capital Infrastructure I, which reached a final close in February 2017. The fund, which has a net target of between 8 and 10 percent, was generating returns of 12.5 percent as at June last year, according to documents from Aberdeen Standard Investments. It was launched in June 2015 by Standard Life Capital before its merger with Aberdeen Asset Management in 2017.

Other assets held by the fund include rolling stock deals in the UK and hydropower and gas distribution investments in Norway and Finland, respectively. The fund’s strategy was to target about half of its deals in the UK, with the remainder in central and northern Europe.

Aberdeen Standard continues to fundraise for its second vehicle – SL Capital Infrastructure II – which was launched in late 2017. Pension documents dated shortly before the launch stated a first close was expected in Q4 2017, although this was dependent on the speed of deployment of the first fund. No first close has been announced and the firm declined to comment on how much has been raised to date or how much has been invested.

Known investors in the second fund include UK local authority pension schemes Nottinghamshire and West Yorkshire, which committed €20 million and £31 million, respectively. The Aberdeen Diversified Income and Growth Trust also invested €28.5 million.

Unlike the first vehicle, the second fund is being raised in euros, understood to be because it is more accommodating to investors from Asia. It has a target of €760 million and a hard cap of €1 billion, the pension documents state, targeting similar returns to the first. SL Capital Infrastructure II has a term of 12 years from the final close, with an optional one-year extension, with management fees structured between 0.8-1.0 percent.

Investments from the fund so far include oil firm terminal group Unitank and Finnish district heating and gas company Riihimaen Kaukolampo. About €2.2 million had been drawn down from the Nottinghamshire pension’s commitment at the end of March 2019, documents show.