Argo doubles third fund target with $2bn final close

Despite fundraising coinciding with the increased uncertainty brought on by the pandemic, Argo’s third fund attracted new investors, as well as larger allocations from prior investors.

Argo Infrastructure Partners has closed its third fund at just over $2 billion, doubling its initial $1 billion target.

Managing director Melannie Pyzik told Infrastructure Investor the firm commenced its latest fund series in early 2020, at the height of the uncertainty caused by covid-19 and anticipated a final close of $1.5 billion at the very most.

“We had our first close around this time last year, a couple of other closes throughout the year and then had our last investors come in recently,” Pyzik said.

“We were rapt to get new investors and our existing investors all generally re-upped with much larger allocations than they had done in our prior series, so that was obviously really helpful and supportive.

“It allowed us to get to that number of $2 billion, which was in excess of what we actually had in mind.”

The fund has a return target range of 9 to 11 percent over a 15-year term, with an option to extend, Pyzik added.

While the firm’s prior funds had predominantly drawn investors from the US and Canada, its latest fund, which was capped at 10 investors, also saw new investment from Europe and the Middle East, as well as Australia, Japan and Korea, with Korea Post confirmed as one of the investors in the fund.

The vehicle, which is the largest raised by Argo since its first in 2015, brings the firm’s total assets under management to approximately $5 billion. It is expected to target long-term investments in lower-risk, mature operational infrastructure assets in the renewables, storage, transmission, generation, transport, digital and water sectors across the US and Canada, in line with the strategy of its two previous funds.

In a statement, managing partner Jason Zibarras said: “The closing of our third fund, during a pandemic, exceeding our target and completed in less than 12 months reflects the quality and capability of Argo’s team seen [through] the strength of our investment track record.”