Exclusive: Orion nears third close on debut infra debt fund

The firm expects to have collected more than $500m by the end of February as it advances towards a $750m final close this summer.

New York-based Orion Energy Partners is preparing for a third close at the end of this month that will put its inaugural infrastructure debt fund at over $500 million, Infrastructure Investor has learned.

A source familiar with Orion’s fundraise said the firm will be over two-thirds of the way to meeting its $750 million target for the Orion Energy Credit Opportunities Fund II by the end of February. Orion has been raising this fund since the end of 2015 and is on pace for a final close this summer, the source said.

The fund is targeting the North American energy infrastructure sector, including midstream oil and gas, power and asset services, such as drill equipment rentals. It has collected investments from a mix of US, European and Australian pensions, and is targeting gross returns of between 15 and 18 percent and net returns of 12 to 15 percent.

Though this is Orion’s first infrastructure debt fund, the firm’s chief executive and co-founder, Nazar Massouh, raised a similar vehicle in 2013 for Energy Capital Partners, collecting $805 million.

Orion is looking for investments ranging between $25 million and $200 million and has already closed on two deals, only one of which has been disclosed, the source said. Last September, drilling equipment rental service Tiger Rentals Group agreed to a $110 million senior first lien term loan with the firm.

Asante Capital Group is acting as Orion’s placement agent, according to regulatory filings.