Dalmore seals £430m first close on third fund

Nine LPs have committed towards the vehicle’s £500m target, as the firm mulls investing outside of the UK.

UK-based fund manager Dalmore Capital has reached a £430 million ($568.2 million; €481.1 million) first close on its third infrastructure fund, Infrastructure Investor understands.

The close comes ahead of the fund’s £500 million target, with its hard-cap set at £750 million. The fund was launched earlier this year with a view to securing its total amount by the end of the year.

Dalmore Capital 3 has so far received commitments from nine LPs, including local authority schemes such as Greater Manchester Pension Fund, Derbyshire Pension Fund, Falkirk Council Pension Fund and the Lothian Pension Fund. The Germany-based insurance company Volkswohlbund and Northern Trust Nominees (Ireland) also form part of the investor group.

The fund has a targeted IRR of 10 percent and is largely seeking to invest in PPPs and regulated assets in the UK, although a maximum of 20 percent can be deployed in PPPs in Europe.

Dalmore declined to comment.

Dalmore was part of the consortium led by Macquarie that invested in the UK’s National Grid gas distribution last year with a 4.4 percent stake, while the year beforehand it formed part of the Thames Tideway group. The firm is believed to have been part of an approach for another UK large-ticket item in the form of HS1 earlier this year, although it was beaten by HICL, Equitix and South Korea’s National Pension Service.

It also made an unsuccessful bid on behalf of the Pensions Infrastructure Platform for the offshore transmission link to the Burbo Bank Extension wind farm, which was awarded to HICL and Mitsubishi in July. Dalmore has also teamed up with DIF Infrastructure IV to bid for the Race Bank OFTO.