After €200m plus Euro fund close, Lloyds targets UK and US funds

The UK bank’s infrastructure funds team is in 'the advanced stages' of raising the equivalent of €400m for two separate sterling and dollar-denominated funds, following the successful close of its debut European greenfield infrastructure fund.

The infrastructure funds management team at the UK’s Lloyds Banking Group is in “the advanced stages” of raising two separate UK and US-focused infrastructure funds to complement the European greenfield infrastructure fund it recently closed, sources familiar with the fundraising told Infrastructure Investor.

Earlier this month, Lloyds announced that it had “successfully achieved a first and final closing in respect of raising its latest infrastructure fund,” known as Lloyds Bank European Infrastructure Partners (LBEIP), an unlisted infrastructure fund focusing on greenfield investments across continental Europe. 

Lloyds did not disclose how much money it raised for LBEIP, but Infrastructure Investor can now reveal it raised in excess of €200 million from a group of European pension funds. In addition, the bank is also raising two other greenfield funds: a sterling-denominated fund and a dollar-denominated fund focusing on the UK and US markets respectively, with further developments expected this year.

According to the sources, Lloyds’ infrastructure funds team – led by Gershon Cohen and Sameer Amin – originally went to market with the idea of raising a sole greenfield infrastructure fund targeting around €600 million. 

But the team ended up having to change the proposition to a trio of infrastructure funds – targeting €600 million in total – “to suit investor demand,” one of the sources explained.

All of the funds will be seeded with assets coming from a €150 million ‘warehouse facility’, which allowed the infrastructure funds team to keep writing equity cheques for projects such as a €700 million court public-private partnership (PPP) in Paris, currently nearing financial close; the $2.2 billion Eagle light rail PPP, in Denver, Colorado; and the $305 million Helena Water build-operate-transfer (BOT) project, in Australia, as the team was fundraising for the three vehicles.

However, LBEIP and its two companion funds are not Lloyds’ first infrastructure funds. That distinction goes to the £434 million (€522 million; $686 million) Bank of Scotland Infrastructure Partners LP, a secondary infrastructure fund launched in 2008 and backed by five UK pension funds.

Lloyds is 41 percent-owned by the UK government.