Alinda's second fund closes oversubscribed by $1bn

Alinda Infrastructure Fund II has reached final close at $4bn, exceeding its cover amount by $1bn while falling $1bn shy of its $5bn cap. The fund received first-time commitments from CalPERS’ newly created infrastructure allocation and from the Oregon Public Employees Retirement Fund totalling $500m.

US-based fund manager Alinda Capital Partners has closed its second infrastructure fund after raising commitments of $4 billion during a period when many smaller-sized infrastructure funds fell by the wayside.

London's Heathrow
Airport

Alinda Infrastructure Fund II had a cover amount of $3 billion and a cap of $5 billion. The fund received maiden investments of $300 million from CalPERS’ newly created infrastructure allocation and $200 million from the Oregon Public Employees Retirement Fund. It also received $400 million from the Washington State Investment Board, already an investor in its first infrastructure fund. In addition to pension funds – the main investors in Alinda’s second infrastructure fund – investors include insurance companies, endowments and foundations.

Fund II captured 23 percent of funds raised for infrastructure last year, according to data from placement agent Probitas. Only Macquarie raised more at $2.6 billion but that amount was split among four funds. The amount of funds raised for infrastructure last year declined by 57 percent compared to 2008. It was a year that saw the likes of ING, RREEF and Santander abandon fundraisings for planned infrastructure vehicles because of the difficult environment.

In just under five years, Alinda has raised $7 billion in capital commitments through its two infrastructure funds. Its first fund was launched in August 2005 with a cover of $1 billion but ended up raising $3 billion. This makes Alinda the largest US manager of pension assets for infrastructure and the second-largest in the world, Alinda said in a statement. Both funds target investments mainly in the US and Europe.

To date, Alinda owns positions in seven airports – including the UK’s largest airport, Heathrow – a rail service, four ports, four toll bridges, four gas distribution utilities, two gas pipelines, a water utility, a wastewater facility, over one million water tanks and a municipal services business. Alinda’s portfolio companies employ 240,000 people and serve over 125 million customers annually across the US, Canada and Europe.

Chris Beale, Alinda’s managing partner, said the time is right to invest in infrastructure, as a combination of government budget constraints and their need to upgrade existing infrastructure create opportunities.