Exclusive: I Squared to beat $5bn target with December close

I Squared Capital is gearing up to surpass its second infrastructure fund’s original $5 billion target this December, as it prepares for a final close of up to $6.5 billion during the first quarter of 2018, Infrastructure Investor understands.

The New York-based firm recently held a first close on just more than $4 billion from new and existing investors from across the globe. Some of the fund’s commitments include $150 million from Texas Municipal Retirement System, $50 million from New Mexico Educational Retirement Board and $40 million from Rhode Island State Investment Council.

Fund II is a mid-market vehicle focused on brownfield acquisitions in the transportation, utility and renewables sectors. It already has two deals under its belt, including the $1.9 billion acquisition of Hong Kong fixed-line business Hutchison Global Communications and a Houston-based midstream company called Pinnacle Midstream, purchased from BP Energy Partners.

I Squared’s debut infrastructure vehicle closed on $3 billion, drawing more than 45 investors from around the world. That fundraising took 15 months from launch to final close. The Rhode Island investment council published documents from its August meeting showing Fund I, which closed in 2015, is generating a 15 percent net internal rate of return.

The manager was founded 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.

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.