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Exclusive: Bastion has $400m for debut fund

The Canadian-based firm launched the vehicle more than two years ago with a $2bn target.

Bastion Infrastructure Group (Bastion), a Toronto-based fund manager, has so far raised $400 million from six institutional investors and is approaching a first close on its debut infrastructure fund, Infrastructure Investor has learnt.

According to sources with knowledge of the firm, Bastion is now aiming to collect $650 million for this first close, and is hoping to hit its $2 billion target within the following 12 months. 

Reaching a first close would be a welcome milestone for the manager, which has been raising the fund since at least October 2013. Several sources Infrastructure Investor recently spoke to had been questioning whether the manager was still attempting to raise a vehicle.

In addition to the six limited partners that have already made commitments, there are several other large institutional investors at the due diligence stage, one source told Infrastructure Investor.

The firm has already deployed an undisclosed portion of the fund, according to the source. Last May it acquired, along with Allianz Capital Partners, a 100 percent stake in three operating commuter rail projects from Catalonia-based Comsa Emte, two of which are in connection with the Metro Line 9 in Barcelona, while the third is related to the Metro Ligero Oeste in Madrid. All three assets have a remaining concession life of 26 years.

Bastion was established in mid-2012 by Ron Lepin, its current managing partner. Before starting his own firm, Lepin founded and led the direct infrastructure programme of Canada’s Ontario Teachers’ Pension Plan between 2002 and 2006. He then joined Wall Street investment bank Morgan Stanley where he served as managing director and chief operating officer of the $4 billion Morgan Stanley Infrastructure Partners fund.

Lepin began to build out his team, hiring long-time Cintra and Grupo Ferrovial executive Enrique Fuentes as partner in February 2013. Soon after, Wael Elkhouly left Eiser Infrastructure Partners to join Bastion, followed by Kevin Kerr, who between September 2011 and October 2013 had served as senior managing director within the strategic investments division of the Ontario Municipal Employees Retirement System.

In addition to the four partners, the firm has a team of 10 investment professionals.

National Australia Bank, which holds an undisclosed stake in the firm, provides financial backing. According to documents filed with the Australian Securities Exchange (ASX), Bastion is an 'associated entity' of the bank.

According to the firm’s website, Bastion is focused on acquiring low-risk and low-volatility cash generating infrastructure assets in the power, water, transportation and energy infrastructure sectors, primarily in OECD countries.

Bastion declined to comment.

 

Additional reporting by Matthieu Favas