DIF halts debt fundraising process – exclusive

The Dutch manager was targeting €1.1bn for the dual senior and junior offering but has been unable to generate sufficient interest.

DIF Capital Partners has scrapped plans to raise €1.1 billion for what would have been its maiden infrastructure debt strategy, Infrastructure Investor has learned.

The Dutch manager, which began raising its first infrastructure equity fund in 2005, started raising capital for DIF Investment Grade Infrastructure Debt Fund I and DIF Enhanced Return Infrastructure Credit Fund I, targeting €750 million and €350 million, respectively, for the senior and junior strategies, in the summer of 2020. It is believed that no capital had been raised so far, so there will be no process of returning proceeds to LPs.

The strategy was being led by partner Paul Nash, who had been with DIF since 2008. Nash described the expansion into infrastructure debt to Infrastructure Investor in October 2020 as a “logical step” for the firm. Nash has now retired and departed DIF, although he will remain with the firm in a non-executive capacity.

Infrastructure Investor understands that the fundraising process came up against difficulties securing capital from LPs reluctant to back a first-time debt fund manager, particularly during virtual fundraising processes, despite the group’s success in the equity market. In Infrastructure Investor’s Debt 30 ranking released last week, listing the largest raisers of infrastructure debt capital between January 2016 and August 2021, the lowest on the list – NN Investment Partners – had raised $812 million in the time period.

Confirming the halting of the fundraising process and Nash’s departure, a spokesperson for DIF told Infrastructure Investor: “As per the 31st of January, Paul Nash, partner and head of infrastructure debt, took early retirement as a partner following DIF’s decision to put the infrastructure debt fundraising on hold. This decision was a result of a re-focus of the organisation on the accelerated launch of the fundraising of both DIF VII and DIF CIF III in the first half of 2022, whereas the fundraising of the new infrastructure debt funds appeared to be more challenging, particularly also in covid times.”

The spokesperson added: “DIF would like to sincerely thank Paul for his contribution to the organisation, having started the UK office in 2008 and having led the infrastructure origination team for several years and taking responsibility for the roll-out of DIF’s infrastructure debt activities since 2019. Paul will remain involved as non-executive for DIF.”

Infrastructure Investor reported last month that DIF had begun raising its latest flagship fund – DIF Infrastructure VII – targeting €4 billion, while also seeking a further €1.5 billion for its Core-plus Infrastructure Fund III.