Global Infrastructure Partners' Capital Solutions Fund has taken a majority position in a preferred equity investment of up to $250 million in a US midstream firm.
The investment is in Caprock Midstream, a Houston-based company investing in oil, natural gas and water infrastructure assets. The firm was created in 2015 as a partnership with private equity firm Energy Spectrum Capital.
The preferred equity investment was accompanied by commitments from Caprock's senior secured-term loan facility and additional common equity from Energy Spectrum. Caprock will use the proceeds to invest in assets in the Delaware Basin, in the south-west US.
“Caprock's assets provide a critical connection between the upstream and downstream segments of the energy value chain and benefit from Caprock's strong market position in the Delaware Basin,” said Reiner Boehning, a co-managing partner of GIP's CAPS fund.
Last month, GIP hired Jennifer Powers, a former Mizuho managing partner, as a partner and chair of its growing credit business.
The Capital Solutions Fund, GIP's debt fund, has raised around $1 billion, according to Infrastructure Investor data. Known commitments to the fund include $200 million from Oregon State Treasury public pension fund. Pension documents indicate the vehicle is aiming for a net IRR of between 9 percent and 11 percent, inclusive of a 5 percent to 7 percent cash yield.
In January, GIP set a record for the largest unlisted infrastructure equity fund ever raised – the $15.8 billion GIP III fund.