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‘Groundswell of adoption’ helps Tiger quadruple size to $1.2bn

The firm, which closed its last fund on $301m in 2018, drew in LPs as they embraced its growth investment strategy, founder Emil Henry says.

Tiger Infrastructure Partners has closed its third fund on $1.25 billion, four years after raising $301 million for its second strategy.

The close of Tiger Infrastructure Partners Fund III, which was launched in 2020, sees it reach its hard-cap, having originally been targeting $750 million. It had raised about $550 million at the end of 2021, according to documents from the Connecticut Retirement Plans and Trust Funds, which invested $100 million into the fund earlier this year.

“There has been a noticeable groundswell of support and adoption of our innovative strategy by very large institutions driven in part by the consulting and gatekeeper community that has been watching us closely for years,” Tiger founder Emil W Henry told Infrastructure Investor when asked about the rapid momentum in fundraising in recent months, adding that LPs were also attracted by the presence of five existing assets within the fund.

The firm has so far invested in agriculture-focused carbon capture platform Summit Carbon Solutions, air cargo infrastructure developer NorthLink Aviation, cloud connectivity and security provider 11:11 Systems, EV charging operator Qwello and Forsa Energy, a flexible power generation developer.

The innovative strategy – as described by Henry – focuses on a growth capital model. This means it typically “invests in platforms during their growth phase with the expectation that they will become larger and more mature infrastructure investments on exit, attracting a broad range of strategic and financial buyers”, according to the presentation provided to the Connecticut scheme.

“I believe Tiger was the first infrastructure fund to focus on growth equity, a strategy well-known to global asset allocators but new to the infrastructure asset class,” added Henry. “Many in the institutional investor community – including infrastructure and regular way private equity investors – have now embraced growth capital for infrastructure and real assets as an important and differentiated addition to their portfolios.”

The 10-year fund targets a gross IRR of 20 percent, fund documentation states, with investments in the energy transition, communications and transport sectors in the US (75 percent) and Europe (25 percent). It charges a 2 percent management fee and a 20 percent carry. As of the end of September 2021, Fund I and Fund II were generating net IRRs of 17.4 percent and 16 percent, respectively.

While the 2013-vintage Fund I raised $113 million and the 2017-vintage vehicle $301 million, they also received $685 million and $352 million in co-investment capital, respectively.