Exclusive: I Squared nears first close for $5bn infra fund

I Squared Capital’s sophomore fund is expected to reach a first close at roughly half its $5 billion target in two to three months, according to a source with knowledge of the fundraising.

The New York-based firm launched I Squared Global Infrastructure Fund II earlier this year and has lined up commitments from institutional investors from around the world, the source told Infrastructure Investor. The mid-market vehicle is focused on acquiring brownfield assets and building infrastructure companies.

I Squared declined to comment for this story.

One commitment the firm has secured so far is from the $25 billion Texas Municipal Retirement System, which approved last week a $150 million allocation, according to documents from the pension’s June meeting.

I Squared was created in 2012 by former Morgan Stanley Infrastructure Partners executives to invest in and create platform companies in the power, energy and utilities sectors. Sadek Wahba, previously MSIP’s chief investment officer, is the firm’s managing partner and is joined by Adil Rahmathulla and Gautam Bhandari.

I Squared closed its debut infrastructure vehicle in 2015 at $3 billion, drawing more than 45 investors from around the world including the New Mexico Educational Retirement Board, the Texas Employees Retirement System and Danish pension administration firm PKA. That fundraise took 15 months from launch to final close.

The firm has since established or purchased platforms including Lincoln Clean Energy, its development arm for wind and solar projects in North America; Asia Cube Solar, which invests in ground-mounted and rooftop solar projects; and Cube Hydro, a company that develops and operates small to mid-sized hydroelectric plants.