Alinda targets $3bn for new ‘core’ infrastructure fund

A fundraising effort for the Alinda US Core Infrastructure Fund is under way, with former CPPIB infrastructure head Graeme Bevans serving as the head of the firm’s new core infrastructure team. The fund will focus on ‘mature, operating infrastructure investments’, according to information disclosed by a California pension.

Alinda Capital Partners is expanding its fund management business into a US-focused “core” strategy for which it is seeking $3 billion in investor commitments, according to an email disclosed by a US pension approached by Alinda for a commitment to the new fund.

The Fresno County Employees’ Retirement Association, a $3 billion pension in the central California county, published a January email from an Alinda investor relations representative, Joanne Rios, in which Rios detailed the firm’s new “Alinda US Core Infrastructure Fund”.

Rios declined to comment on the firm’s fundraising.

However, the email confirms months of market chatter about a “core” fund the firm had been said to be raising ever since it hired Graeme Bevans, former head of infrastructure at the C$140.1 billion (€98.5 billion; $145 billion) Canada Pension Plan Investment Board in July 2010. Rios said in the email to the Fresno County pension that Bevans will serve as head of the core fund, though Chris Beale “will remain involved” with the fund and will serve as chairman of its investment committee.

The fund will focus on “mature, operating infrastructure investments with high cash yield from the outset”, Rios said in the email, and will target a gross internal rate of return of 12 percent. The fund will also target a cash yield of 5 percent for the first year and a 7 percent average over the life of the fund, which will be a closed-end vehicle targeting $3 billion.

“We believe that we have a successful, differentiated strategy by buying better, analyzing better and managing better. We do not believe that many managers are implementing a core infrastructure strategy successfully in the United States,” Rios said in the email.

Alinda already manages two other funds, Alinda Capital Partners I and II, focused on value-added infrastructure assets, or infrastructure assets that present a growth opportunity in addition to the steady return characteristics typical of the asset class. The first fund, vintage 2006, closed on $3 billion in June 2007, while the second fund, vintage 2008, closed on $4.1 billion in January 2010. Placement agent CP Eaton Partners helped the firm raise its first fund.

Connecticut-based Alinda Capital Partners was founded in August 2005 by ex-Citi bankers Chris Beale, Sanjay Khettry, John Laxmi and Simon Riggall and former Ahlstrom Capital chief Philip Dyk, who are all partners of the firm. Bevans and James Metcalfe, a recent addition to the team, are the firm’s sixth and seventh partners, respectively.