London-based Hermes GPE is looking to reach an interim close on its Infrastructure Fund by the beginning of December, according to several sources with knowledge of the firm.
The fund manager has now garnered more than £800 million (€1.0 billion; $1.3 billion) for the vehicle, thereby surpassing its original target. It is now progressing towards a hard cap of “more than £1 billion”, the sources said. Hermes GPE declined to comment.
In July, Infrastructure Investor reported that the firm had held an interim close on the fund on more than £700 million after adding another £210 million to the pool. A spokesperson for Hermes confirmed then that the fund had a final target of £800 million, but said it had the capacity to increase this by an unspecified amount.
LPs in the vehicle include a number of UK local government pension schemes, such as the Santander (UK) Common Investment Fund.
Peter Hofbauer, head of infrastructure at Hermes GPE, last month told Infrastructure Investor that he expected more such investors to target infrastructure in the near future, creating opportunities for managers as long as they offered appropriate investment solutions. “Across UK pensions as a whole, allocations to infrastructure average about 2 percent. This is low by international standards.”
Hermes now has more than £2.8 billion of infrastructure assets under management altogether, including a £2 billion direct investment managed account programme for the BT Pension Scheme. The portfolio currently comprises 11 assets valued at around £1.2 billion, which are mainly direct investments in UK core and value-added strategies. These have included the likes of water utility Anglian Water Group, wind energy firm Fallago Rig and solar-focused company A Shade Greener.