Circuitus reaches €450m first close

Group’s debut fund is targeting €2bn and gross returns of at least 15%.

Circuitus Capital has reached a €450 million first close on its maiden fund as it seeks a €2 billion target.

The London-based firm launched the Circuitus Real Asset I fund about a year ago. The launch took place shortly after the firm was founded by construction and concession companies Sacyr and Fininc, alongside Carsten Kengeter, a former Deutsche Börse chief executive, and Niccolo Ragnini Kothny, a former head of finance at Goldman Sachs International.

At the time of launch, sources said the firm was expecting a first close in June 2018 and a final close 18 months thereafter. Circuitus would not comment on the delay in the fund reaching its first close. However, a source familiar with the fundraising told Infrastructure Investor that the first close occurred last December and was delayed due to “administrative processes” rather than any inability to attract capital.

Circuitus said in a statement that the first-close commitments had principally come from Sacyr and Fininc. It would not disclose any other investors. The firm said it has no timeframe on a final close.

The fund is seeded with the €2.6 billion Pedemontana-Veneta highway PPP in northern Italy, the first phase of which opened this week. The asset has a 39-year concession spanning 162km, around 60 percent of which is now complete. Circuitus said it has a right of first offer of investment opportunities provided by Sacyr and Fininc.

According to a document seen by Infrastructure Investor, Circuitus Real Asset I is targeting a gross return of at least 15 percent and an annual cash yield of 5 percent. The 12-year fund has an investment period of five years.

Given Sacyr’s and Fininc’s focus on transportation, around 60 percent of the fund’s investments are planned to be in this sector. The remaining 40 percent are to be divided equally between water and energy projects.

The fund plans to invest 25 percent of its capital in Italy and 20 percent in Latin American countries. Spain and Portugal are also significant investment targets.

“It is a differentiated approach which resonates well with the investment community,” Kengeter said in a statement. “We are encouraged by the strong interest we have seen from investors for the next stage of fundraising.”

Infrastructure Investor reported at the fund’s launch that around 70 percent of its deals were set to be greenfield assets, typically with ticket sizes of between €200 million and €300 million. The vehicle is also offering co-investment opportunities.