Barclays’ Fund VI closes short of target on £645m

Barclays Infrastructure Funds, the infrastructure equity investment arm of Barclays Bank, has closed its sixth infrastructure fund on £645m. The firm claims to be pleased with the final amount given prevailing market conditions since it was launched – despite falling shy of an £800m initial target.

Barclays Infrastructure Funds has closed its sixth fund – Barclays Integrated Infrastructure Fund – on £645 million (€738 million; $1.0 billion). The London-based business had set an initial target of £800 million for the social infastructure-focused fund when fundraising commenced in 2008.

“Given the way the market conditions have been during fundraising we're very pleased to have reached the total we did,” Rob Styles, investor relations director at Barclays Infrastructure Funds, told Infrastructure Investor.

The fund is the largest raised by the firm to date. Its most recent predecessor fund, Fund V, closed on £280 million, although the largest prior fund was a £560 million joint venture with Societe Generale, which closed in 2003.       

The firm declined to name specific investors in the fund but said commitments had come from corporate pension funds, local authority pension funds, insurance companies, asset managers and sovereign wealth funds.

The firm is continuing to target social infrastructure but said that it will “focus on generating long-term yield whereas previous funds have focused more on a capital appreciation model”.

Asked about this strategic evolution, Styles said: “It was predominantly investor-driven. There was much more interest from long-term investors than in the earlier funds. There's more awareness of infrastructure as an asset class and investors are increasingly differentiating between infrastructure sub-sectors, such as social infrastructure.”

The fund is initially structured as a 15-year fund but with the ability to convert to an evergreen structure. “This will enable Barclays Infrastructure Funds to develop further the long-term partnership approach to infrastructure investing,” the firm said in a statement.

The fund will initially concentrate upon investing in brownfield projects from which it expects to generate a secure and predictable yield, with later investments in greenfield projects also sought. 

The firm, which has offices in London and Paris, will target social infrastructure projects in the UK and Euro zone countries.

In total, Barclays Infrastructure Funds has £1.2 billion under management and is generating current yield from 84 concession-based projects with an operating life of up to 25 years.