Fundraising

Edmond de Rothschild targets up to €750m with new infra debt fund

The new vehicle has been split into two sub-funds, with one reserved for those targeting higher returns.

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French asset management group Edmond de Rothschild has launched the latest instalment of its BRIDGE infrastructure debt platform, looking to raise between €500 million and €750 million from European investors.

Edmond de Rothschild expects to reach a first close this month, a spokeswoman for the firm told Infrastructure Investor, but she declined to disclose a figure.

BRIDGE IV will consist of two sub-funds, one of which is designed to specifically target deals in the energy transition space. BRIDGE IV Senior Energy Transition has a target of €500 million and is accompanied by BRIDGE IV Higher Yield, designed to secure greater returns with a smaller target of €250 million.

The Higher Yield vehicle is looking to secure returns of between 5 and 7 percent, while Senior Energy Transition targets 200 basis points-plus over base rate.

The energy transition fund has been certified with the Transition Energy and Ecological for the Climate label, a marker of a fund’s commitment to the sector created by the French government in 2016. SCOR Infrastructure Loans III, a €500 million debt fund launched in December, also received the label, while equity funds launched by Mirova and Omnes have also been beneficiaries.

The other sub-fund will continue to focus on the BRIDGE platform’s targets from previous funds such as transport, energy, utilities, social and telecom assets. The firm added that, while BRIDGE IV Higher Yield has not obtained the label, it believes a “strong percentage” of its deals will meet the energy transition criteria.

Edmond de Rothschild said its previous infrastructure debt funds are 90 percent deployed, investing in 25 assets for a total amount of €1.15 billion, including a €74 million refinancing of an 18.2MW solar portfolio in Spain in September. The first BRIDGE fund totalled €595 million after being launched in August 2014, with the second fund reaching a similar size last year. Also in 2017, it launched BRIDGE-II.2, a co-investment vehicle set up for one investor who needed a shorter tenor.

The launch of the debt fund follows plans revealed by Edmond de Rothschild last month to team up with Pearl Infrastructure Capital to raise €200 million for investments in environmental infrastructure.